After beginning the week strongly, corn futures slipped lower as the Tuesday trading session passed. Weather concerns are probably providing considerable support at this juncture, since forecasts imply growing dryness over the central U.S. and major crop areas of Brazil and Argentina; these are raising very pertinent questions about the forthcoming South American harvest. However, American corn exports have remained poor during early winter, while demand from the domestic ethanol industry has slowed. The market seemed to suffer a dearth of corn news overnight, which explains the relative lack of price movement. March corn had edged 3/4 cent higher to $7.29 1/4 early morning trading, while December gained 1 1/2 cents to $5.91 1/2 per bushel.
Traders were reportedly buying soybean futures in response to growing worries about prospects for South American crops Tuesday. The weather in their main bean growing areas has recently shifted to a hot, dry pattern, thereby threatening to curtail yields. Ongoing U.S. soybean exports have also proven very strong lately. Talk that China will continue buying U.S. beans aggressively over the short term apparently encouraged bulls to push prices sharply higher Tuesday. These same factors seemed to support nearby futures overnight, although hopes for an improved 2013 U.S. harvest appeared to weigh upon the deferred contracts. March beans inched 1/2 cent higher, to $14.52 1/4, in pre-dawn activity, while March soyoil was unchanged at 52.43 cents/pound and March meal gained $0.7 to $422.3/ton.
U.S. wheat exports have improved lately, which, when combined with the persistent dryness dominating the Winter Wheat Belt, are supporting wheat prices at the various Midwest commodity exchanges. That strength is also being supplemented by less than optimal growing conditions around the globe. For example, an overnight report indicated that a big heat wave is hurting the spring Australian crop. The same report also cited active Australian exports. Thus, it is not terribly surprising to see U.S. wheat prices generally higher this morning. On the other hand, the size of those gains was not very impressive. Ultimately, the inability of bullish traders to push the March CBOT contract above the pivotal $8.00/bushel level Tuesday suggests the market may need to consolidate recent gains before making another run at that resistance. March CBOT wheat was unchanged at $7.79 1/4 in overnight trading, while March KCBT wheat rose 1 1/2 cents to $8.32 1/4 and March MGE futures actually slipped 1/4 cent to $8.64/bushel.