Ag markets mixed Wednesday morning

Corn futures continued to creep up with a few cents higher or so Wednesday morning. Slow farmer selling was resulting in firmer basis as the cold weather spurs domestic feed demand. At the same time demand from ethanol plants is rising as well. But export demand is still sluggish. News out of China said the country is planning to build more containers to reduce storage pressure due to increasing stockpiles of grains. December corn futures advanced 2.75 cent to close at $3.77/bushel Wednesday, while May was up 2.75 cents to $3.985.

Soybean futures suffered a setback along with weak soymeal values in the morning trading after prices shot sharply higher at close time Tuesday. However, firming basis owing to slow farmer sales curbed the losses. Export demand remains robust as USDA’s daily reporting system announced that private exporters sold additional 120,000 tonnes of beans to China. Reports yesterday that the U.S. Congressional Budget Office (CBO) has a preliminary forecast for soybean acreage in the U.S. to drop by 2 million acres in 2015 also holds a positive implication. January soybean futures retreated 8 cents to $10.43/bushel early Wednesday, while December meal was up $4.6 to $395.2/ton. December soyoil added 0.06 cents to 33.48 cents/pound.

Wheat futures posted a mixed note with strength showing front-month contract Wednesday morning. Profit-taking actions undercut the market. But fundamentals of slower farmer selling and ongoing uncertainty about vulnerability to winterkill in parts of the U.S. Plains were still bullish. Talk of poorly established crop to start with and lack protective snow cover in Black Sea region is also supportive. December CBOT wheat boosted 5.25 cents to $5.5675/bushel Wednesday, while December KC wheat moved 3.00 cents higher to $6.205/bushel, whereas December MWE wheat gained 3.00 cents to $5.9375.

Feeder cattle rebounded and moved slightly higher following a speculative sell-off yesterday. But live cattle futures were mixed with lower nearby contract and higher deferred contract. USDA just recently raised its retail beef price forecast again for 2014 and predicted still further rise in 2015.Firming corn prices and a surge in supplies from the fall calf may still add pressure to the market. Further upside for both cash and futures is vulnerable with packer margins deep in the red despite soaring retail prices. January feeder cattle futures gained 0.425 cents to 231.80 cents/pound, and March feeders rose 0.775 to 230.700.

Hog futures were rather mixed Wednesday morning. Yesterday’s downside reversal just short of the downtrend line in December futures giving charts a weak appearance. Rising slaughter runs aren’t particularly bearish since they’ve just risen to levels consistant with Hogs & Pigs report data after running suspiciously low for several weeks prior. Cash hogs are steady to firm as we’re nearing the end of any seasonal bulge in slaughter numbers and the time when ham demand picks up right after Thanksgiving. December hog futures fell 0.25 cents to 90.7 cents/pound Wednesday, and April hogs gained 0.425 to 92.075.