Soy & cotton markets diverged from gains in the other ag markets

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The grain markets remained strong despite Wednesday’s soy losses. Corn and wheat have recently tracked soaring soy markets, but grain quotes remained quite elevated despite Wednesday’s soy reversal. Wire service sources cited fund activity and technical action for the sustained corn strength. December corn futures rallied 4.0 cents to $3.7775/bushel in late Wednesday trading, while May ran up 3.5 to $3.99.

The soy complex was reportedly hit by active profit-taking. Although the spot bean and meal markets apparently remain quite tight, CBOT futures suffered sharp reversals today. Wire service reports cited aggressive profit-taking for the drop, but technicians probably joined the selling as well. More may occur if bulls can’t regain the upper hand pretty quickly. January soybean futures dove 16.25 cents to $10.4775/bushel at their Wednesday close, while December soyoil fell 0.65 cents to 32.22 cents/pound, and December meal tumbled $5.6 to $395.0/ton.

Weather concerns apparently boosted the wheat markets. Given the bearish global wheat situation, a golden grain decline in concert with beans would not have been very surprising. However, traders apparently worry that the current cold spell will seriously diminish the SRW wheat crop next year. Thus, prices proved surprisingly strong Wednesday. December CBOT wheat leapt 17.5 cents to $5.4275/bushel Wednesday trading concluded, while December KC wheat soared 20.75 cents to $5.9925/bushel, and December MWE wheat jumped 14.5 to $5.8125.

Beef strength probably spurred cattle buying. CME cattle have recently struggled despite supportive fundamental and seasonal factors. However, the nearby contracts held above short-term moving average support early this week, which may have set the stage for today’s bullish response to the strong midsession beef quotes. The rise may presage stronger cash quotes late this week. December live cattle futures closed up 0.50 cents at 167.75 cents/pound Wednesday afternoon, while April futures advanced 0.72 to 168.22. Meanwhile, January feeder cattle futures surged 0.72 cents to 233.27 cents/pound, and March feeders vaulted 1.25 to 231.80.

Talk of firming spot markets again seemed to support CME hogs. Cash hog prices were called steady Wednesday morning, but pork cutouts apparently rose modestly before noon. The market continues acting as if a short-term, across-the-board advance is in the offing. December hog futures rallied 0.77 cents to 90.67 in late Wednesday action, while April hogs climbed 0.70 to 91.70.

Cotton followed beans lower Wednesday. Financial market weakness seemed to undercut cotton futures Tuesday night, but subsequent losses were probably exaggerated by selling spilling over from the soy complex reversal. The fact that the global cotton situation looks rather ugly very likely encouraged bears as well. December cotton futures dropped 1.36 cents to 61.94 cents/pound at Wednesday’s ICE close, while March futures slumped 1.19 cents to 60.94.

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