Financial market reversals seemed to boost most ag markets

The crop markets exhibited surprising strength Thursday morning. Overnight grain weakness seemed to reflect bearish equity market expectations, as well as an acceleration of the fall harvest as the Midwest dries out. However, the crop markets rebounded significantly by midmorning, which probably reflected a sizeable sale announced this morning, as well as the late-morning stock market comeback. December corn futures rebounded 3.5 cents to $3.51/bushel late Thursday morning, while May moved up 3.5 cents to $3.73.

Soybeans and meal seemed to pull soyoil upward as well. The soy situation doesn’t seem very bullish at this point, especially after Wednesday’s NOPA crush report proved disappointing. Still, traders apparently believe underlying protein demand remains robust, as exemplified by the December meal contract’s push above its 40-day MA. Soyoil also rose despite continued losses in the crude oil market. November soybean futures gained 8.25 cents to $9.6075/bushel just before lunchtime Thursday, while December soyoil bounced 0.13 cents to 32.11 cents/pound, and December soymeal climbed $7.0 at $334.3.

The wheat markets may be reacting to the financial markets. Little news clearly supportive of wheat prices emerged this morning, but the golden grain market proved surprisingly firm. Talk of Brazilian buying reportedly encouraged bulls, as did the early push above resistance around their 50-day MAs. The late-morning dollar drop and concurrent equity bounce seemingly sparked a sizeable wheat advance. December CBOT wheat surged 9.5 cents to $5.155/bushel in late Thursday morning trading, while December KC wheat jumped 10.0 cents to $6.02/bushel, and December MWE wheat leapt 11.75 to $5.765.

Cattle traders apparently reacted to the equity comeback. The recent drop in stock prices had rather obviously weighed on cattle futures, since traders worried about depressed beef demand over the short run. Thus, it isn’t too surprising to see CME futures rebounding in concert with stocks. Wednesday’s late cash quotes (at $163.87 in Nebraska) may also be encouraging bulls. December live cattle futures vaulted 1.47 cents to 163.95 cents/pound around midsession Thursday, while April futures ran up 0.90 to 161.00. Meanwhile, November feeder futures vaulted 1.50 cents to 235.65 cents/pound and January feeders soared 1.70 to 229.82.

Big cash losses are weighing on hog futures. Pork prices stabilized Wednesday after having plummeted the day before. However, cash hog prices dove yesterday, thereby spurring fresh Chicago selling today. Early CME losses suggest traders are seeing more of the same today. December hog futures dove 1.25 cents to 90.67 cents/pound as the lunch hour loomed Thursday, and April hogs plunged 1.77 to 87.22.

Cotton futures seem rather stuck at the moment. Although ongoing shifts in the equity and currency markets may be affecting the cotton market, fiber prices have proven surprisingly stable this week. One has to suspect the December future is stuck between support associated with its 10-day moving average and resistance around its 40-day MA. December cotton futures rose 0.12 cents to 63.83 cents/pound shortly before noon (EDT) Thursday, while March futures edged up 0.17 cents to 61.94.