Hog futures fell sharply Wednesday

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China news apparently boosted corn futures Wednesday. Although the market is still suffering from harvest pressure and from a sizeable Brazilian production forecast, prices rose modestly in early trading. That almost surely stemmed from Tuesday night news that a private Chinese firm had bought 420,000 tonnes of U.S. corn last week. December corn futures closed 1.75 cents higher at $4.435/bushel Wednesday, while May added 2.0 cents to $4.6475.

Soybeans and meal remained weak Wednesday. Brazil’s CONAB forecast that country’s 2013/14 soybean production in the 87.6-89.7 million tonne range, which essentially matched recent USDA predictions; that robbed the news of market-moving power. As a consequence, beans and meal seemingly continued suffering from U.S. harvest pressure. Oil futures rallied in response to Asian palm oil strength. The product markets are probably responding to the unwinding of meal/oil spreads as well. November soybeans slid 1.0 cent to $12.8775/bushel in late Wednesday action, whereas December soyoil climbed 0.24 cents to 40.67 cents/pound, and December soymeal tumbled $3.2 to $411.7/ton.

Wheat futures turned downward Wednesday afternoon. CONAB’s estimate of Brazil’s forthcoming wheat crop largely matched USDA figures, so the news had little market impact. Strong demand still makes the golden grain outlook seem promising, but prices have already risen substantially from late-summer lows. That may explain bulls’ recent inability to push prices decisively higher and the wave of profit-taking that hit the markets today. December CBOT wheat sagged 3.0 cents to $6.905/bushel at its Wednesday settlement, while December KCBT wheat stumbled 1.5 cents to $7.59, and December MGE futures slumped 0.25 cent to $7.53.

Cattle futures may have suffered from financial market spillover. Bearish cattle traders likely blamed a portion of Wednesday’s weakness on a few delivery notices posted against expiring October futures and a partial South Korean ban on U.S. beef after some meat containing Zilmax was found yesterday. However, the recent decline in the equity indexes and the bounce by the U.S. dollar imply reduced demand for U.S. beef. December cattle futures sank 0.37 cents to 131.95 cents/pound at Wednesday’s close, while April lost 0.40 to 134.67. Meanwhile, November feeder cattle inched up 0.05 cents to 166.37 cents/pound, and January skidded 0.20 to 166.37.

Cash and wholesale weakness may have undercut hog futures. The livestock industry is still suffering from reduced information. Nevertheless, the weakness exhibited by swine futures today strongly suggests the short-term cash and/or pork outlook is less than promising at this juncture. Wire service reports cited long liquidation and technical selling for the drop, but cash and/or wholesale strength probably would have limited the losses. December hog futures dove 1.67 cents to 86.52 cents/pound as Wednesday’s CME session ended, while April fell 0.85 cents to 89.70.

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