Wheat, Crude Finish Up
A reversal in corn futures rippled through livestock markets, leading to selling in live-cattle and lean-hog contracts, but gains in beat-up feeder-cattle futures. Lower feed costs can lead to higher meat production and better demand for young animals at feed yards. CME Aug cattle down 0.3% to $1.18/lb with other contracts also lower. Feeders for Aug bounced 0.6% to $1.4422/lb, still down more than 10% since mid-June. Sept corn lost 3.1% to settle at $6.96/bushel. All hog contracts except nearby July were also lower as signs of weak demand added pressure. July up 0.5% to 95.95c/lb. Oct down 2.2% to 81.1c/lb.
U.S. wheat futures are trading higher Wednesday, fueled by higher corn prices and falling expectations for world wheat supplies. Chicago Board of Trade futures for September delivery rose 10 1/4 cents or 1.2% at $8.32 a bushel. Kansas City Board of Trade September wheat rose nine cents or 1.1% at $8.31 a bushel. MGEX September wheat ended up 11 cents or 1.2% at $9.29 a bushel.
Soybean futures also rose on the USDA's morning report before turning negative later in the day on profit-taking, analysts said. Front-month soybean futures set new all-time highs on Monday, making some analysts question how much higher prices can go. The USDA cut its yield forecast for the soybean crop to 40.5 bushels per acre from 43.9 bushels per acre, due to the drought in the Midwest. Analysts on average had expected a smaller cut, to 42.3 bushels an acre. Thinly traded July soybeans ended down 25 3/4 cents, or 1.6%, at $16.23 a bushel. November soybeans fell 16 cents, or 1.0%, to $15.22 1/2 a bushel.
Cotton futures settled slightly higher after the USDA cut global 2012-13 cotton production, but it won't mean much a year from now. Federal forecasters still expect record high stockpiles of the fiber by the end of the next season, on July 31, 2013. Now the ball is in the southern hemisphere's court, where big growers like Brazil, Australia and Argentina will plant in the last quarter of the year. "Given the heavy cotton fundamentals, prices are not likely to move higher without major negative weather impacts," says Rabobank. Cotton for Dec delivery ended 0.4% higher at 71.02c/lb.
Nymex crude futures Wednesday overlooked bearish elements in a U.S. oil inventory report and the lack of concrete news on Federal Reserve stimulus to finish the day firmly in positive territory. Light, sweet crude for August delivery settled at $85.81 a barrel on the New York Mercantile Exchange, up $1.90 or 2.3%. Front-month Brent crude gained $2.26 per barrel to close at $100.23. Front-month reformulated gasoline blendstock, or RBOB, settled at $2.77 a gallon, up 2.2 cents. Front-month heating oil settled at $2.76 a gallon, up 4.2 cents.
Natural gas futures gained more than 4% Wednesday after a sharp drop in the previous session, as investors bet that hot weather has cut down on the massive U.S. gas supply glut. Natural gas for August delivery settled 11.6 cents higher at $2.853 a million British thermal units on the New York Mercantile Exchange, after falling more than 5% Tuesday.
Gold edged lower Wednesday on euro-zone concerns and investor doubt that the Federal Reserve minutes being released in the afternoon will indicate plans for a fresh round of monetary easing. The most actively traded contract, for August delivery, was down 0.4%, or $6.30, at $1,573.50 per troy ounce on the Comex division of the New York Mercantile Exchange.
The Down and Nasdaq indices finished in the red again Wednesday, while the S&P futures were near flat. Dow Jones Industrials lost 48 points to finish at 12604. Nasdaq closed at 2887, down 14. The S&P 500 closed at 1341.