Crop and livestock futures set to open mixed on Thursday

Corn futures expected to open steady to a nickel higher. Corn futures traded a little higher overnight, gaining back a little of the ground lost on Wednesday. The trading range for corn is narrowing and a breakout above or below the range should happen soon. With little other news to trade on, the data in the Export Sales report could influence price direction this morning. Export shipments need to be near 34 million bushels for corn to stay on pace to reach the current USDA crop year forecast. Crop futures could be pressured by a likely decline in the stock market early Thursday.

Soybean prices are expected to be steady to lower on Thursday morning. Soybean futures traded as much as 10 cents lower overnight, but had struggled back to about unchanged late in the session. The market is overbought with huge noncommercial net long positions, but the bullish underlying fundamentals have prevented any long-liquidation sell-off. Traders expect the Export Sales report to be above the 12 million bushel level needed to stay on pace to reach the export forecast.

Wheat futures are expected to open mixed on Thursday. Wheat prices in Chicago and Kansas City traded about 2 cents to 3 cents higher overnight but the spring wheat contracts were lower. Wheat prices are rebounding from the sizable declines on Wednesday and the trend is still up. Wheat export shipments need to come in at 25 million bushels to stay on the export pace, but traders expect actual shipments to fall short of the level needed.

Cattle prices are called 10 cents to 50 cents higher on Thursday. So far no major foreign buyers have indicated that they will ban or restrict imports of U.S. beef as a response to the discovery of a case of BSE on Tuesday. That has given traders a little confidence to get back into the cattle market. However, the rebound in prices on Wednesday fell far short of Tuesday's decline. Cash cattle trade is expected to pick up on Thursday with prices near the week ago level. Prices for boxed beef rose a little on Wednesday, but the gains were small.

Hog prices are expected to open lower on Thursday. Another dip in the pork cutout on Wednesday will set the stage for a lower opening for hog futures prices Thursday. The pork cutout fell by 75 cents to $76.87 Wednesday, not quite the lowest of the year – but very close. Cash hog prices were also lower on Wednesday and bids are expected to be steady to lower this morning. Hog futures rebounded on Wednesday, partially erasing the losses triggered by the news about the case of BSE. But the downtrend in prices is still evident and we need to see pork prices turn higher to get a sustained rally in futures.

Cotton prices are expected to open 20 to 60 points higher. There is little new news to move the market, but the uptick in equity markets on Wednesday provide a little support for cotton futures. Traders expect the Export Sales report to show a positive number on Thursday after three consecutive weeks where cancellations have exceeded new sales. Cotton prices have generally been trending higher for the last two weeks.


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