Markets – May 13, 2016

U.S. grain futures closed sharply higher Thursday, boosted by speculation that farmers’ move to boost soybean acres could eat into domestic corn production.

July-dated corn contracts at the Chicago Board of Trade 11 1/2 cents, to close at $3.89 a bushel, their second-highest settlement in May, after prices gained steam late in the Thursday trading session. May-dated contracts, less actively traded with expiration nearing, added 3% to settle at $3.85 1/4.

A strong pace for export sales of U.S. corn helped lift futures, along with speculation among traders that Midwestern farmers may switch 1 million to 2 million acres from corn to soybeans after a U.S. Department of Agriculture report this week showed U.S. oilseed stockpiles falling fast.

Such a move could shrink what analysts have projected could be another big U.S. corn crop.

Chicago-listed wheat contracts also were higher, with July-dated futures rising 9 cents, to settle at $4.68 a bushel.

July-dated soybean futures sunk 6 1/4 cents, to settle at $10.72 a bushel, the second straight day of declines after prices rocketed on Tuesday’s USDA report. The contracts remain 4.5% higher for the week. Stocks ended pretty much where they started after a day of wavering between small gains and losses.

Cattle futures gave up early-session gains to end lower Thursday, pressured by profit-taking after climbing to one-month highs.

June live-cattle futures fell 0.25 centto $1.22 a pound on the Chicago Mercantile Exchange after rallying to the highest levels in a month earlier in the trading day. Cattle for August fell 0.27 cent to $1.19 a pound. Feeder-cattle futures for May slid 0.37 cent to $1.48 a pound.

An estimated 40,000 head across major cattle feeding regions were sold Thursday, all at higher prices compared with last week’s sales.

Cattle futures this week have also been buoyed by hopes that U.S. grilling season, which typically kicks off the week before Memorial Day weekend, will usher in heavier beef promotions and sales.

The surge in cash prices sparked a midday rally in futures before some investors booked profits on earlier bets. The quick rally in cash cattle and beef prices worried other investors, analysts noted, as demand tends to thin at loftier price levels.

U.S. hog futures, meanwhile, were buoyed by recent strength in demand for pork from U.S. and export buyers.

Most-active hog futures for June rose 0.175 cent to 83.00 cents a pound.

The Dow Jones industrial average edged up nine points, or 0.1 percent, to 17,720. The Standard & Poor’s 500 index fell a fraction to 2,064. The Nasdaq composite index dropped 23 points, or 0.5 percent, to 4,737.