Corn futures continued trading mostly sideways Tuesday night. Bullish news such as strong Chinese ethanol imports, persistent South African dryness and talk that Russia may impose export taxes on corn and barley appears to be completely offset by plentiful global supplies and the prospect of large South American crops during the weeks ahead. Bulls have had no success in extending last Friday’s big technical advance, but bears have also proven unable to force the nearby March contract price back below its pivotal 40-day moving average. March corn futures slipped 0.75 cent to $3.685 /bushel in early Tuesday trading, while May slid 1.0 cent to $3.735.
Fresh talk of improved South American weather appeared to weigh on the soybean market Wednesday, thereby offsetting likely spillover support from the big rise in the equity and energy markets. Prices firmed overnight, although the reasons for that strength weren’t particularly apparent. That seems especially true when one considers early morning weakness in the latter markets. Ultimately, soybean traders seem to be awaiting events, as evidenced by the nearby March contract’s recent habit of settling right on its 40-day MA. March soybean futures rose 1.5 cents to $8.78 Tuesday night, while Mar soyoil followed Asian palm prices up 0.06 cents to 30.80 cents per pound and March meal added $0.30 to $270.20.
The Chicago wheat market proved able to extend its seeming bullish breakout over 40-day moving average resistance Tuesday, with concerns about potential winter freeze damage and increased restrictions on Russian exports appearing to encourage buying. Prices dipped overnight, although there was little fresh news. Wire service sources cited general energy and financial market weakness for the decline. The US dollar also slid overnight, which could offer considerable support, thereby reinforcing technical backing after the Monday-Tuesday advance. March CBOT wheat dropped 2.75 cents to $4.82 per bushel as Wednesday dawned over Chicago, and March KC wheat skidded 2.75 cents to $4.74, while March MWE sagged 1.0 cents to $5.025.
Strong US equity markets, along with rising crude oil prices, fueled higher live cattle futures on Tuesday. Bull spread trading also supported the front months while adding pressure to the deferred months. Falling packer margins could pressure cash bids on the slimmer margins. Wholesale beef cuts were mixed, Choice cuts gained 0.81 to $224.60, while Select cuts fell 1.17 to $217.77. A strong cash market and higher live cattle futures supported feeder cattle futures. February live cattle advanced 1.60 cents to 133.025 cents/pound on Tuesday’s close, while April futures grew 1.18 cents to 133.400. March feeder cattle rose 1.47 cents to 159.250 cents/pound and April feeders climbed 1.32 cents to 158.650.
Firm wholesale pork values and a strong cash market boosted lean hog futures Tuesday. Plant-based pork cutout jumped $1.18 per cwt to $76.76 on 3 cent-plus gains by ribs and shoulders. Retailers are adding to demand, betting on lower hog supplies this spring. That seems to agree with current ideas that underlying pork demand is proving very strong. Country hog prices are up 0.49 to $55.95. February hog futures closed 0.80 cents/pound higher at 64.325 cents/pound Tuesday, while April hogs added 0.83 cents to 69.600 cents/pound.
Led by non-commercials exiting bull bets, cotton futures traded its lowest level in over 3 months. Speculators exited long positons after futures fell further on uncertainty about China’s potential release of its large stockpiles. Similar to short covering, down ticks push exaggerated dips as funds trim long positions. China’s textile exports for the first 1 months of 2015 fell 2.6% over the same period in 2014. Clothing exports also declined, dropping 7.7%. Certificated cotton stocks deliverable against ICE futures fell 5% from the previous session to 58,627 bales, which is likely adding support due to the potential for a short squeeze. Recent news that China’s December cotton imports fell almost 40% from year-ago levels isn’t helping sentiment. Early stock index and crude oil futures losses in the wake of Monday night gains left the cotton market modestly lower in early morning action. March cotton dipped 0.19 cents to 61.41 cents/pound on Tuesday’s close, while May cotton sagged 0.09 to 62.01 cents/pound.