Wheat futures favored a weaker tone throughout the session Wednesday, although deferred contracts saw periods of firmer trade. Wheat futures closed slightly lower at all 3 exchanges. Strength in the USD index led to widespread selling in the commodity sector. It's somewhat impressive that losses in the nearby Wheat contracts were mostly in the range of 0.03 to 0.07 given double-digit declines in nearby Corn and Soybean futures.
May and Jul Corn futures closed 0.15 and 0.1325 lower, respectively. The Sept contract was 0.0175 lower, while new-crop contracts ended a penny lower. Old-crop Corn futures posted a low-range close, while new-crop contracts finished mid-range. Bull spread unwinding was again featured in the Corn market today. After peaking at $1.1275 on 3 April, the May/December Corn spread tightened to 0.73 on today's close.
Soybean futures finished low-range with losses of 0.1675 in the May through Mar 2013 contracts. Soyoil also finished low-range with moderate losses, while Soymeal closed mid-range with slight to moderate losses. Funds sold an estimated 6,000 Soybean contracts, 30-M bu. today. The Soybean market had fresh demand news today, China purchased 120,000 metric tons (MT) of new-crop US beans, but contrary to the recent trend, the market paid this sale little attention.
Cotton futures ended 148 to 250 pts higher in the May through Oct contracts, with the rest of the market ending 63 to 85 pts higher. Futures were higher despite negative outside markets and news that India, the World's 2nd-largest Cotton grower, would export a record amount of Cotton this year. India's government said it has approved exports of an additional 1.9-M bales of Cotton.
Lean Hog futures finished low-range with losses ranging from 1.675 to 2.55. Nearby contracts posted the heaviest losses. Lean Hog futures did some serious chart damage today, thanks to disappointing Pork performance. Pork cutouts again failed to string consecutive days of gains together, as prices softened 1.10 Tuesday, though movement improved.
Live Cattle futures posted sharp losses in most contracts, finishing 1.00 to 1.75 lower in the Apr through Dec contracts. All but some of the far-deferred contracts ended in the lower portion of Wednesday's trading range. Live Cattle started Wednesday's session with a firmer tone, but heavy spillover from lean Hog futures and outside markets quickly put the market on the defensive.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.