The ag futures markets will trade normal hours today (12/31) and Friday (1/2), but, of course, will be closed on New Year’s Day. Still, trading volume is likely to be light, with various interests evening up positions for the end of the calendar year. Doane offices will close around midday and won’t reopen until Monday, January 5. The recent corn decline persisted Tuesday night. That probably reflected long liquidation in the wake of the surprising fourth-quarter rally and ahead of today’s year-end closing. March corn futures dipped 1.75 cent to $4.0475/bushel early Wednesday morning, while July lost 1.25 to $4.205.
Talk of increased South American production seems to be weighing on the soy complex. Soybean and product futures have posted a mixed showing during the year-end holiday season, although the nearby contracts for all three markets moved lower Tuesday night. That probably reflect position squaring on the part of many traders, but wire service sources also pointed out that a private forecaster had boosted his estimate of Brazil’s forthcoming bean crop by one million tonnes. January soybean futures skidded 2.25 cents to $10.355/bushel in predawn Wednesday trading, while January soyoil declined 0.20 to 32.69 cents/pound, and January meal sank $2.3 to $367.2/ton.
The wheat markets also moved mostly lower overnight. After posting an impressive rally on Russian export issues through mid-December, wheat futures continued the subsequent reversal Tuesday. The fact that nearby contracts fell below their respective 20-day moving averages seemingly bodes ill for the short-term technical outlook, especially with the end of the year looming. March CBOT wheat slid 1.25 cents to $6.0075/bushel Tuesday night, while March KC wheat slipped 1.0 cent to $6.35/bushel, but March MWE wheat inched up 0.75 to $6.28.
Cattle futures failed at moving average resistance Tuesday. Significant Monday beef gains sparked a strong opening in live cattle futures yesterday morning, but bulls couldn’t sustain the push above the nearby contracts’ 40-day moving averages. That seemed to spur a wave of profit-taking before the end of the year. Feeders sustained moderate gains. The afternoon beef report indicated fresh strength, so futures seem likely to open higher. February live cattle closed down 0.30 cents to 164.70 cents/pound Tuesday, while April futures dropped 0.60 cents to 163.57. January feeder cattle futures advanced 0.87 cents to 218.32 cents/pound and March feeders climbed 0.57 cents to 216.25.
Signs of firming spot markets may have limited Tuesday’s hog losses. CME swine futures have recently followed cash hog and wholesale pork prices lower. However, talk of firming spot quotes, as well as the cash market’s history of posting annual lows during the holiday season appeared to offer support for the various contracts. Indeed, cash prices proved surprisingly strong yesterday, which bodes well for today’s opening. February hog futures slid 0.62 cents to 81.17 cents/pound in late Tuesday trading, while June hogs stumbled 0.45 cents to 91.07.
The weekly commitments report seemingly undercut cotton futures. Strong export news, as well as surging equity index readings, have pushed cotton futures significantly higher in recent weeks. That was reflected in Tuesday’s oddly timed release of the latest Commitments of Traders report from the CFTC. It indicated that bearish speculative positions in the cotton market had fallen to their lowest level since July, thereby suggesting bulls in the market are overexposed. The overnight breakdown seemingly marked a reaction to the CFTC news. March cotton futures dove 1.06 cents to 60.92 cents/pound shortly after sunrise Wednesday, while the July contract tumbled 0.94 to 62.55.