Ethanol news seemingly powered Thursday’s corn rally. The USDA’s Outlook Forum got underway this morning, but little market-moving corn news was forthcoming. However, yellow grain prices turned sharply higher around midmorning, which apparently marked a bullish reaction to news that U.S. ethanol stocks declined last week despite a modest production increase. That implies robust demand, thereby sustaining strength into the close. March corn rallied 6.0 cents to $3.8975/bushel in late Thursday trading, while July advanced 5.75 to $4.0525.
The soy complex turned decidedly mixed by Thursday’s close. The API released information on energy production and stocks ahead of the official EIA data today, thereby triggering oil selling and corn and soy gains. Both the ethanol and distillate numbers were impressive, with bean oil initially reacting well to the news. Bulls were also encouraged by the USDA’s relatively low soy planting figure from the Outlook Forum, although many harbored big doubts on that score. March soybean futures surged 11.5 cents to $10.0725/bushel as CBOT trading ended Thursday, while March soyoil declined 0.18 cents to 31.82 cents/pound, and March meal jumped $8.9 to $347.5/ton.
The wheat markets couldn’t sustain midsession gains. Morning news of strong European wheat exports reemphasized the fact that U.S. grain remains quite expensive by global standards and may be vulnerable to a sizeable downward adjustment. The USDA’s 2015 wheat seedings figure seemed rather high when compared to private estimates, but appeared to have little impact. Wheat futures seemed to follow corn and soybeans higher at midday, but turned lower before the close. March CBOT wheat ended Thursday unchanged at $5.2775/bushel, while March KC wheat slid 3.5 cents to $5.445/bushel, and March MWE wheat tumbled 8.0 to $5.74.
Cattle traders may be expecting cash weakness. Recent spot market developments have seemed very supportive of live cattle futures, especially with the nearby contracts trading at sizeable discounts to last week’s cash levels. And yet, futures proved surprisingly weak today, which may reflect fresh pessimism about the likely result of this week’s cash trading. April cattle futures fell 1.12 cents to 151.50 cents/pound at their Thursday CME settlement, while August cattle sank 0.17 cents to 142.67 cents/pound. Meanwhile, March feeder cattle futures slumped 0.55 cents to 202.55 cents/pound and May feeders tumbled 0.45 to 200.90.
Spot firmness spurred strong CME hog gains. After falling consistently for weeks, the cash hog and wholesale pork markets are showing clear signs of firming. The fact that they seem to be bottoming in the absence of a resolution to the export situation is probably encouraging traders as well. April hog futures soared 2.82 cents to 67.05 cents/pound at Thursday’s settlement, while June hogs leapt 2.20 to 81.45.