Grain and soybean futures inched higher Wednesday as speculation about the impact of inclement domestic weather continued to guide trading.
With enormous domestic and global stockpiles, traders are looking for any signs that poor weather might disrupt this year’s harvest and ease the downward pressure on prices.
Analysts remain divided over how much the weather will impact the crops. The U.S. Department of Agriculture showed corn plantings as of Sunday on track with historical averages, while an ongoing crop-quality tour in Kansas has yet to report a dramatic decline in wheat yields.
Analysts say both those outlooks could quickly change, however, with more rain expected in parts of the Midwest in the coming days and the Wheat Quality Council tour heading into new parts of Kansas.
Traders have nevertheless built small premiums into grain and soybean prices in recent days.
May wheat futures closed 0.3% higher at $4.43 a bushel in Wednesday’s session at the Chicago Board of Trade. CBOT May corn closed up 0.6% at $3.66 1/4 a bushel.
Soybeans, which are at an earlier stage of planting than corn, rose 0.8% to $9.65 1/2 a bushel, the highest close since late March.
Cattle futures jumped to their daily upper limit on Wednesday as cash prices continued to rise.
Tight supplies of cattle and strong demand for beef have sent prices skyrocketing in recent weeks, as packers stock up on red meat ahead of celebrations on Mother’s Day and Memorial Day.
Cattle traded on the cash market sold at a considerable premium to previous weeks, with lighter-weight animals creating a supply pinch. The U.S. Department of Agriculture reported sales on Wednesday of $1.45 to $1.46 a pound in southern states, with highs of $1.47 further north.
Packers were able to loosen their purse strings after beef prices prices soared. A pound of wholesale beef rose to $2.32 as of Wednesday morning, compared with $2.07 a little under a month ago.
Live cattle futures for June delivery rose 2.4% to $1.30 a pound in Wednesday’s session at the Chicago Mercantile Exchange, hitting the daily upper limit of the exchange-mandated trading band. Contracts for August delivery also rose limit up.
The momentum from the cattle trade helped carry hog futures, which rose to multimonth highs on Wednesday. CME June lean hog futures closed 1.9% higher at 75.55 cents a pound, the highest close since February 17.
Pork and hog prices have broken out of a prolonged slump recently, with meatpackers forced to pay more on the cash market as supplies tighten. Hog dealers say they expect a seasonal uptick in demand to boost prices in the weeks to come.
The Dow Jones industrial average edged up 8 points, less than 0.1 percent, to 20,957. The Nasdaq composite fell 22 points, or 0.4 percent, to 6,072. The Standard & Poor’s 500 index edged down 3 points, or 0.1 percent, to 2,388.