Most ag markets rose in concert with equities Thursday

The crop markets exhibited surprising strength Thursday. Overnight grain weakness seemed to reflect bearish equity market expectations, as well as an acceleration of the fall harvest as the Midwest dries out. But the corn market rebounded by midmorning, which probably reflected a sizeable sale announced earlier, as well as the late-morning stock market comeback. December corn futures settled up 4.75 cents to $3.5225/bushel Thursday afternoon, while May moved up 4.75 cents to $3.7425.

The whole soy complex performed well Thursday. 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 rallied in concert with the midsession crude oil bounce. November soybean futures climbed 14.0 cents to $9.665/bushel at their Thursday settlement, while December soyoil rallied 0.36 cents to 32.62 cents/pound, and December soymeal gained $7.3 at $334.6.

The wheat markets may also have reacted to the financial markets. Little news clearly supportive of wheat prices emerged today, but the golden grain markets proved surprisingly firm. Talk of Brazilian buying reportedly encouraged bulls, as did the early futures push above resistance around their 50-day MAs. The late-morning dollar drop and concurrent equity bounce seemingly sparked a big advance. December CBOT wheat surged 11.0 cents to $5.17/bushel in late Thursday trading, while December KC wheat leapt 13.0 cents to $6.05/bushel, and December MWE wheat jumped 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 wasn’t surprising to see CME futures rebound in concert with stocks. December live cattle futures spiked 2.82 cents to 165.30 cents/pound at their Thursday close, while April futures ran up 2.35 to 162.45. Meanwhile, November and January feeder futures vaulted their 3.00-cent daily limits to 237.15 and 231.12 cents/pound, respectively.

Big cash and wholesale losses weighed on hog futures. Cash hog prices dove yesterday, thereby adding to pressure triggered by Tuesday’s wholesale drop. Cutout values were also quoted sharply lower at midday, thereby triggering fresh CME selling. December hog futures closed 1.60 cents lower at 90.32 cents/pound Thursday, and April hogs plunged 2.55 to 86.45.

Cotton futures proved quite contrary Thursday. One would have expected recent equity market losses to depress cotton futures, since such circumstances don’t favor strong apparel demand. However, cotton prices relatively stable earlier this week. Moreover, today’s equity rebound seemingly did little to prevent a concurrent cotton slide, the reasons for which were not at all obvious. December cotton futures ended Thursday’s ICE session having fallen 0.15 cents to 63.56 cents/pound, while March futures dipped 0.06 cents to 61.71.