Grains are higher again in the overnight trade with all complexes trading higher across the board. The latest push of support for corn prices is coming largely from dry weather concerns in southern Brazil and also here in the U.S. The seven-day forecast shows beneficial showers for central Brazil, but amounts remain light for the new second corn crop in the southern part of the country. Here in the U.S., Thursday morning’s weather map is mostly dry with some snow in Wyoming. The southwestern U.S. Plains is expecting moderate precipitation Thursday and Friday, but then turns dry for the western Plains next week, while the Eastern Corn Belt has chances for light to moderate showers. Temperatures stay below normal and will keep planting progress slow.
On China’s Dalian exchange, May corn was up 1.0%, May soybeans were up 0.9%, May soybean meal was up 0.9% May bean oil was up 0.4%. May common wheat on China’s Zhengzhou exchange was unchanged. June Malaysian palm oil is trading up 1.1%.
Cattle futures continue to struggle. Traders seem to have lost their confidence in the market and are reducing some of their long positions. It is unclear as to why the market has not been supported over the past week other than pressure from feeder cattle that has been pressured by higher grain prices. Once cash cattle were traded significantly higher last week, it seemed as if the market ran out of steam. Boxed beef prices have been strong this week, indicating continued strong demand, but packers still have not indicated as to what price they are willing to purchase cattle. The general consensus is for $1.00 to $2.00 higher, but the market cannot be completely sure at this point. Weekly exports will be an important part of price direction. If these remain low, then there may be more supplies for the domestic market, limiting upward price potential. One thing for sure is that it will be difficult to regain what has been lost over the past week.
Hog futures came to life Thursday, reducing the concern that a top may have been established. The market still has its work cut out in order to reach back to new highs, but Wednesday’s action provides hope. Cash was slightly lower with cutouts significantly lower, but the market seemed focused on tightening supplies. The market may have found some minor strength from the increase in China’s hog price. Hog prices in the country have been weakening for a period of time potentially as a result of farmers selling due to continued problems with Africa swine fever. With prices turning higher, it could indicate liquidation of the herd is finished, leaving less available pork for their market. This may increase China’s appetite for U.S. pork. However, that is a big “if.” Projected hog slaughter for Saturday is 77,000 head.
