New corn contracts under pressure on Wednesday

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Corn futures settled mixed on Wednesday. Old crop contracts ended higher while new crop contracts were under pressure throughout the day. Forecasts for rain across the U.S. Corn Belt weighed on the market; however, if conditions remain dry as they are currently, prices will rise again. The market is still pressure from Tuesday’s bearish Supply/Demand report. Old crop ending stocks were reported higher than expected; there were no revisions to new crop estimates. Old crop exports were reported down 50 million bushels from the previous month. The dollar index was down but provided minimal support to prices.

Soybean futures settled 17 to 28 cents lower on Wednesday. Soybean futures plummeted despite a price friendly USDA Supply/Demand report. Weather was the dominant factor for corn and soy markets today. Forecasts for rain across the U.S. Midwest this week were bearish for prices. The market was also under pressure due to slower than anticipated economic recovery in China, the world’s largest soybean importer. Market fundamentals remain strongly bullish for the soybeans. USDA trimmed both old crop and new crop ending stocks thanks to strength in the export market. The dollar index was down but neutral for prices.

Wheat futures settled mixed but mostly lower on Wednesday. Wheat futures traded volatile much of the session. Prices seemed to rally as the market reacted to the Australian government’s reduction in its 2012/13 wheat outlook by approximately 7 percent, decreasing global stocks and increasing demand for U.S. wheat. However prices turned as corn and soybean markets continued to post moderate losses. USDA supply/demand forecasts for winter wheat output weighed on prices as well. The report pegged winter wheat output at 1.684 billion bushels, topping analyst’s estimates.

Cattle futures closed moderately lower on Wednesday. The market saw sharp declines with contracts posting losses as much $2 per cwt. Cattle futures tumbled on setbacks in the outside markets and shaky beef demand. Investors looked to liquidate long positions as the state of the global economy remains uncertain. Boxed beef prices were lower at midday; with choice and select down slightly. Cash trade remains undeveloped with light trade reported in Kansas. Packer margins remain favorable and cash trade is expected to pick up towards the latter part of the week with steady prices.

Lean hog futures settled higher on Wednesday. The market closed higher on continued price support from higher cash prices and shrinking supplies. Pork cut-out value was up again along with seasonal demand for pork products. USDA reported the cut-out up 91 cents at $88.30. Spillover pressure from sharp declines in the cattle market along with weakness in outside markets weighed market prices down at midday, but prices were able to rally, ending the day on a high note.



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