Corn prices are expected to open 10 to 15 cents higher on Thursday. There are rumors that China is back in the market buying U.S. corn and this news gave corn futures prices a boost overnight. Prices were up for both new crop and old crop, suggesting there is buying interest for both years. An increase in Dow Jones futures overnight and a weaker dollar were also positive for corn futures prices. Export shipments need to be near 35 million bushels for exports to stay on pace to reach the current crop year forecast.
Soybean prices are forecast to open 10 cents to 16 cents higher on Thursday. Positive developments in the corn market provided spill-over support for the soybeans sector. The short term and loner term outlooks for soybeans are both positive and the monthly crush data was bullish. Export shipments are expected to come in above the 12.6 million bushels needed to stay on pace for the current crop year forecast. There is a good chance that ending stocks will come in below the most recent USDA fore cast of 250 million bushels.
Wheat prices are called higher on Thursday. Overnight futures prices in Chicago and Kansas City were up 9 cents per bushel or more, but the gains were much small in Minneapolis. The wheat market is drawing strength for what is happening in corn and soybean markets. Wheat prices have been generally declining so far this month and the overall outlook is generally bearish. Current cash prices are competitive with corn for feed use. Some weakness in the dollar overnight should also give a boost to wheat futures prices.
Cattle prices are expected to open 20 cents to 50 cents higher. There was some cash market activity on Wednesday at prices steady with last week. In addition the rebound in boxed beef prices continued. The choice cutout has increased by more than $9 in just the last 4 days. Processing margins are still negative, but they have improved dramatically this week. Cattle futures prices are still at a discount to cash and the June contract indicates a seasonal decline in cattle prices over the next 45 days. Declining poultry production is helping support beef demand and the worst of the lean, finely textured beef problem seems to be behind us.
Hog futures are forecast to open 40 cents to 70 cents higher. Cash hog prices managed to gain about 40 cents on Wednesday on top of the 45 cent gain on Tuesday. But the pork cutout value continues to erode, down $1.32 over the last 2 days. Processing margins were awful when the week started and they are worse now. Still, hog futures traded higher overnight. Traders remain hopeful that hog prices are bottoming out and that we will still see the seasonal increase in prices over the next couple of months. Lower beef and poultry production should give hog prices a boost, but there has been little evidence of it recently.
Cotton prices are called 20 to 60 points higher at the open. Cotton prices posted big gains on Wednesday and they were higher again overnight. India’s Cotton Advisory Board cut their estimate of ending stocks and boosted the export forecast. Their forecast for ending stocks is below 2 million bales, while the latest USDA forecast puts India’s ending stocks at 9.55 million bales. The July futures contract is now back above the 90 cent per pound mark.