Ag markets decidedly mixed Wednesday afternoon

The financial market situation seems quite supportive of the commodity outlook at this point, since equities are rising from record highs and the dollar is quite weak today. Those usually imply firm commodity demand. Nevertheless, corn futures declined Wednesday. Tight old crop conditions seemed to limit early losses, but growing anticipation of accelerated plantings during the next week or so apparently undermined the whole complex as the day passed. July corn closed 7.0 cents lower at $6.33/bushel Wednesday afternoon, while December dropped 7.25 cents to $5.32.

Tight supplies and firm prices continued supporting nearby soybean futures Wednesday morning; bulls also got a boost from a USDA report of a 115,000-tonne sale to China for the 2013/14 crop year. Despite the possibility that accelerating corn plantings could diminish acreage switching from corn to beans, deferred soy futures also proved weaker than their nearby counterparts. The tight meal situation probably caused the divergence between the product markets. July soybean futures rose 8.0 cents to $13.9075/bushel at their Wednesday settlement, while July soyoil dipped 0.32 cents to 48.82 cents/pound, and July soybean meal climbed $5.2 to $408.5/ton.

Wheat futures slipped Wednesday morning in concert with their counterparts in the corn pit. However, uncertainty about the impact weather is having on the winter wheat crop and spring wheat plantings seemed to support the KCBT and MGE markets. Chicago price rather obviously moved lower in tandem with corn. July CBOT wheat futures slipped 3.0 cents to $7.06/bushel at its Wednesday close, while July KCBT wheat rose 2.25 cents to $7.6025, and July MGE futures advanced 10.25 cents to $8.1625.

Cattle futures succumbed to fresh downward pressure Wednesday in reaction to news that a few country cattle had traded 1-2 cents lower than last week just before noon. The cash and futures losses were rather stunning when viewed within the context of a 3.26-cent spike in choice beef cutout. That certainly suggests feedyard managers will prove much less willing to take lower prices for their cattle later this week. The nearby contracts are already trading at large discounts to cash. June cattle fell 0.62 cents to 120.20 cents/pound to end the Wednesday pit session, while December dropped 0.97 cents to 124.72. August feeder cattle futures tumbled 1.22 cents to 145.32 cents/pound, while November dove 0.67 cents to 150.10.

In contrast, to the cattle market, optimism about the short-term situation boosted CME hog futures Wednesday. The fact that country prices have risen dramatically over the past 2-3 weeks has almost surely translated into support for nearby futures, especially since their premiums to spot values have declined drastically during that time. June hog futures climbed 0.47 cents to 91.77 cents/pound at its Wednesday close, while December futures gained 0.20 cents to 78.15.


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