Sliding soy meal futures took starch out of crop markets Tuesday
Doane Advisory Services | Hagadone News Network | UPDATED 10 years, 2 months AGO
Corn futures set back in concert with soybeans. Soybeans and meal led the crop markets sharply higher Monday night and Tuesday morning, with bulls apparently banking on robust demand and slow harvests to power prices higher. However, the surge ran out of momentum and bullish profit-taking and fresh selling greatly reduced the gains. Corn did close slightly higher. December corn futures ended Tuesday having gained 1.5 cents to $3.645/bushel, while May added 1.25 to $3.8675.
The soymeal rally ran out of steam Tuesday morning. Beans and meal soared again Monday night, but set back substantially from their early highs. Wire service reports blamed profit-taking and weakness in deferred futures for the meal reversal. Oil likely benefiting from the meal weakness on crush spread shifts, which in turn may have limited bean losses. November soybean futures closed up 2.0 cents to $10.08/bushel Tuesday, while December soyoil jumped 0.56 cents to 32.79 cents/pound, but December soymeal dipped $1.7 to $375.1/ton.
The wheat markets performed comparatively well. Strength spilling over from the soy complex obviously supported the wheat markets overnight, but golden grain prices remained quite firm as Tuesday passed. The surprisingly low winter wheat condition rating on the Crop Progress report and a report arguing that Australian production will fall 5% short of forecasts almost surely encouraged bulls. December CBOT wheat rallied 8.0 cents to $5.3075/bushel at their Tuesday close, while December KC wheat advanced 7.25 cents to $6.02/bushel, and December MWE wheat lifted 5.0 to $5.7675.
Surging beef prices failed to spur cattle gains. The cattle market resumed its mixed trading when the GLOBEX commenced at 8:00 AM this morning. (Again, CME electronic trading hours have changed.) Indeed, futures moved generally lower despite a midsession leap in beef quotes. This suggests underlying industry concerns about the late-2014 outlook. December live cattle futures slipped 0.05 cents to 167.77 cents/pound in late Tuesday action, while April futures slid 0.50 to 165.77. Meanwhile, November feeder cattle futures fell 1.15 cents to 233.65 cents/pound, and January feeders sagged 0.40 cents to 229.05.
Hopes of improving conditions reportedly spurred CME hog buying. The cash hog and wholesale pork markets remained weak at midsession Tuesday, but that negative news did little to depress nearby futures. Wire service reports suggest traders are hoping forthcoming hog numbers fall short of bearish expectations, whereas they reportedly expect recent pork losses to provoke a bullish wholesale response. December hog futures vaulted 1.15 cents to 90.20 cents/pound at Tuesday’s CME settlement, while April hogs rallied 1.25 to 89.55.
ARTICLES BY DOANE ADVISORY SERVICES
Sliding soy meal futures took starch out of crop markets Tuesday
Corn futures set back in concert with soybeans. Soybeans and meal led the crop markets sharply higher Monday night and Tuesday morning, with bulls apparently banking on robust demand and slow harvests to power prices higher. However, the surge ran out of momentum and bullish profit-taking and fresh selling greatly reduced the gains. Corn did close slightly higher. December corn futures ended Tuesday having gained 1.5 cents to $3.645/bushel, while May added 1.25 to $3.8675.
Tuesday's early meal reversal weighed on crop markets
Talk of slow harvesting is again boosting corn futures. Soybeans and meal led the crop markets higher overnight, but have set back from their highs. However, that has done little to discourage corn bulls, who reportedly were encouraged by the persistently slow harvest. December corn futures climbed 4.75 cents to $3.6775/bushel late Monday morning, while May added 4.0 to $3.895.
Ag markets posted mixed closes ahead of Thursday's USDA reports
Traders were looking forward to Thursday’s USDA reports Wednesday. Expectations for a massive corn harvest have weighed heavily upon the market this summer. However, the possibility that tomorrow’s USDA Crop Production and WASDE reports will hold surprises apparently spurred short-covering ahead of their release. Thus, corn futures traded slightly higher. December corn futures closed up 1.5 cents to $3.4575/bushel Wednesday, while May rose 1.25 to $3.6675.