April 5, 2012

Corn and wheat futures lower, soy higher

Amidst pressure from external markets and greatly reduced wheat prices, corn futures finished lower Wednesday (Apr 4).

Crude oil fell and the dollar was higher. Farmer selling is light, which is supportive to the cash market, but weekly ethanol production slowed to the lowest level since September. New-crop prices found underlying support by weather forecasts for next week calling for much cooler temperatures and the possibility of freezing temperatures as far south as the Ohio Valley. May settled 1 1/2 cents lower at US$6.56 3/4 and December was 1 1/4 cents lower at US$5.44 1/4.

Soy futures settled mostly higher on Wednesday. Commodity markets were pressured throughout the day by negative reactions to the latest minutes from the Federal Reserve that were released on Tuesday (Apr 3) afternoon. Soy prices experienced selling during the session, but then rallied late on news that more analysts are expecting that USDA will lower its South American production forecasts next Tuesday (Apr 10). May futures closed 2 3/4 cents higher at US$14.19 1/2 while November fell 3 1/4 cents at US$13.75 1/4.

Wheat futures closed lower Wednesday. Much improved crop condition ratings compared to last year and more welcome rain in dry areas of the Plains kept pressure on futures. Some rain relief in dry areas of Europe added to the negative sentiment, although some European officials say winterkill is worse than expected. MGE futures are still getting some residual support from lower-than-expected planting intentions for spring wheat. CBOT May was 18 3/4 cents lower at US$6.39 1/4; KCBT May was 20 1/2 cents lower at US$6.69 1/2 and MGE May was 4 1/2 cents lower at US$8.45 3/4.

Cattle futures were lower. June futures fell to a new 9 month low as demand concerns continue to mount. Beef prices were down sharply at midday with choice down US$2.31 per cwt to US$180.78, the lowest level since August. The decline in futures also carried over into the cash market. Light cash trade was reported at US$121 in Texas, down US$1 from Tuesday. June cattle futures were 92 cents lower at US$115.12 and August was US$1.15 lower at US$117.87.

Lean hog futures closed mixed on Wednesday. Prices for most contracts were higher early in the session, but the weak and falling pork prices put pressure on futures near the end of the day. The April, May and July contracts closed lower while most other contracts had small gains. Cash hog prices were reported steady to higher on Wednesday. The April contract closed at US$83.85, down 18 cents. June was up 35 cents finishing at US$92.00.

Cotton futures ended sharply lower Wednesday. Outside markets, particularly the stronger dollar, pressured cotton today. The trade is looking for a very low export figure in tomorrow's report, which added to the negative sentiment. May was 332 points lower at 89.32 cents and December was 228 points lower at 88.26 cents.