Divergent livestock futures highlighted Wednesday's market action
BBJ Market Report
Ethanol news likely undercut corn futures Wednesday. The weekly EIA report on the energy sector stated domestic ethanol stocks at an 18-month high, thereby implying diminished corn demand from that sector. That won’t help the grain industry with another massive harvest looming. December corn futures dipped 2.0 cents to $3.4175/bushel in late Wednesday trading, while May sagged 1.75 to $3.625.
Bullish export news supported the soy complex. One has to suspect talk of big Chinese bean buying played a sizeable role in the soy gains posted Tuesday night. The USDA announced Wednesday morning that China had bought 620,000 tonnes of beans for 2014/15 delivery. Prices set back from the early highs, with meal values dropping below unchanged levels. November soybean futures inched up 1.75 cents to $9.825/bushel at their Wednesday close, while October soyoil followed palm prices higher, rising 0.58 cents to 33.39 cents/pound, and October soymeal sank $1.9 to $336.4/ton.
The failed Japanese tender may have encouraged wheat traders. The global wheat situation certainly seems bearish, with glutted conditions having weighed on prices for months. However, news that a Japan got no bids on a Tuesday night tender suggests the price was simply too low for suppliers, thereby implying emerging market support. Wire service sources cited bargain-hunting. December CBOT wheat bounced 3.0 cents to $4.9925/bushel as Wednesday’s pit session ended, while December KC wheat dipped 1.0 cent to $5.8225/bushel, and December MWE wheat slumped 2.5 to $5.63.
Cattle traders became more optimistic Wednesday. After falling sharply last Friday and again Monday, beef prices lost less ground Tuesday. That news, along with a ‘hammer’ reversal signal on the candlestick charts, seemed to encourage cattle traders about short-term cash prospects. October live cattle futures surged 0.82 cents to 157.02 cents/pound as Wednesday’s CME session concluded, while December futures jumped 1.12 to 160.00. Meanwhile, October feeder futures soared 2.22 cents to 228.10 cents/pound, and January feeders leapt 2.35 to 220.12.
Hog futures proved surprisingly weak. Both cash hog and pork values rose significantly Tuesday, thereby seeming to imply more of the same during the days ahead. However, CME futures turned decidedly lower in response to bearish midday spot reports. Those might presage more of the same during the coming days and weeks. October hogs dove 1.77 cents to 105.10 cents/pound at their Wednesday settlement, while December plummeted 2.02 to 93.90.