Financial markets are weighing upon commodities this morning

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U.S. dollar strength may be weighing upon the crop markets. The yellow grain market is still suffering from a dearth of pertinent crop news. However, Wednesday’s U.S. dollar advance and overnight follow-through in response to Fed Chairman Yellen’s suggestion that the Fed might be forced to raise U.S. interest rates next year held negative implications for commodity demand, which probably explains the overnight slide. May corn slid 3.25 cents to $4.845/bushel in early Thursday trading, while December lost 2.25 to $4.865.

The soy complex posted a mixed Wednesday night showing. Although soybean and product markets were generally strong yesterday, they set back significantly from their intra-day highs. That development, along with the financial market reaction to Chairman Yellen’s statement, very likely discouraged bulls last night. Beans and meal did inch higher, but Asian palm weakness exerted fresh pressure upon soyoil values. May soybeans rose 4.25 cents to $14.355/bushel in pre-dawn Thursday action, while May soyoil sank 0.19 cents to 41.91 cents/pound, and May soymeal gained $3.2 at $465.2/ton.

The wheat markets gave back a portion of recent gains last night. Southern Plains dryness, concerns about Black Sea production and exports and seeming optimism about global demand prospects have powered recent wheat gains. Still, given the size of that advance, setbacks such as that seen overnight shouldn’t be terribly surprising. The U.S. dollar surge and equity market reversal posted yesterday afternoon weren’t encouraging either. May CBOT wheat futures declined 3.75 cents to $7.12/bushel early Thursday morning, while May KCBT wheat futures stalled at $7.8825 and May MWE futures dipped 3.5 to $7.575.

Nearby cattle futures traded mixed Wednesday night. Cattle traders are apparently uncertain about likely short-term cash market direction. Beef cutout values declined modestly yesterday, which obviously tended to discourage traders. On the other hand, discounts built into CME futures may be limiting losses. April cattle futures edged up 0.02 cents to 146.15 cents/pound in overnight trading, while August crept up 0.10 cents to 135.45. Meanwhile, April feeder cattle bounced 0.25 cents to 176.90 cents/pound, and August climbed 0.15 to 179.95.

Hog futures are proving surprisingly mixed. Cash hog prices rose again Wednesday, but pork cutout values were flat to mixed. Suspicions that the ongoing price surge is finally curtailing potential summer demand might explain why the summer contracts are losing ground to April and to deferred futures. April hogs advanced 0.55 cents to 124.70 cents/pound as Thursday dawned over Chicago, while June fell 0.60 to 131.65.

Financial market action is apparently weighing upon cotton futures. After surging earlier in the week, the equity markets reversed sharply after Fed Chairman Yellen suggested Wednesday afternoon that the central bank may be forced to raise U.S. interest rates next year. The stock market drop and concurrent climb in the value of the dollar depressed cotton futures, since both of those factors tend to be negative for apparel and cotton demand. May cotton slumped 0.61 cents to 92.01 cents/pound just after sunrise (EDT) Thursday, while December cotton lose 0.29 to 79.70.

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