It's not often that agricultural commodity markets move on talk of the flood threat to a beef plant.
Sure, the main course for financial investors on Wednesday was poor US manufacturing data, with an activity index hitting its lowest since September 2009, and statistics from ADP, the payrolls processor, showing that private employers added 38,000 jobs last month – down from 177,000 in April.
That sent shares lower, by 1.7% on Wall Street in late deals, after a close down 1.0% in London.
And while an initial decline in the
However, talk that Missouri River flooding might shut down Tyson Food's beef plant in Dakota City also injected volatility into farm commodity markets, sending Chicago
The spot June live cattle contract stood 1.6% lower at 102.10 cents a pound in late deals, still looking at its lowest finish for a spot contract for 2011, despite Tyson's assurances that its plant was running and was expected to keep doing so.
"This plant kills 5,000 head per day and the cattle market needs all the kill capacity possible right now," Country Futures said, adding that the new had pressed on
"But common sense began to prevail and understand that if plants along the Missouri are in trouble, then there will be a large number of corn and
Indeed, it brought the focus back on the poor pace of US sowings unveiled by US Department of Agriculture data, showing corn plantings at a nine-year low, and soybean seedings way behind forecasts, and some weather challenges still ahead.
Forecasts showed a ridge of dry weather "breaking down in 10 days in the Plains and Corn Belt," Country Futures said.
"This market cannot afford to lose more acres as we have probably lost 1m-2m corn acres already."
Even more, according to Linn Group, which slashed its forecast for US corn sowings by 2.7m acres to 87.2m acres – meaning a drop in plantings, and way below the 99.2m acres the USDA has outlined.
And Linn believes farmers will opt for insurance payouts rather than switching to soybeans, trimming forecast for sowings of the oilseed by 200,000 acres to 74.9m acres, down 1.7m acres from the USDA figure.
Chicago corn bucked risk markets' downward trend, closing up 1.5% at $7.58 ½ a bushel for July, with soybeans for the same month adding 0.9% to $13.86 ½ a bushel.
While that helped limit falls in Minneapolis [spring] wheat, for which the July lot closed down 1.9% at $10.05 ½ a bushel and the new crop September contract ended down 1.3% at $9.75 ¼ a bushel, Chicago [winter] contracts continued to feel the full weight of Russia's return to grain exports, tipping power to buyers.
"At these price levels many countries want to take advantage of the structure and export as much product as possible," US Commodities said.
Furthermore, prospects for Europe's dry wheat crops have improved, with "the forecast for France and Germany wetter", the broker said, adding that "France has had irreversible damage. Germany has not".
Chicago's July contract closed down 2.9% at $7.59 ¼ a bushel. European lots gave up ground too, with Paris wheat for November ending down 0.6% at E236.25 a tonne, and London's equivalent losing 1.0% to £187.65 a tonne.
And soft commodities were generally weaker too, in line with the broader commodities sentiment.
Sure, concerns for Texas's drought held up
And New York raw