The Wednesday morning combination of equity losses and U.S. dollar gains seemed negative for the agricultural markets, but those posted mixed reactions. The negative economic implications apparently limited strength in nearby corn futures, but the prospect of persistent weather-driven delays to corn plantings across the Corn Belt likely supported the deferred contracts. May corn rose 1.25 cents to $6.645/bushel around midsession Wednesday, while December gained 7.75 cents to $5.485.
The same forces affecting corn futures seemed to undercut soybeans Wednesday morning. That is, the diminished demand implied by declining equity indexes and the concurrent dollar rally weighed upon the nearby contracts. However, delayed corn plantings tend to boost acreage that ultimately gets planted to soybeans, so it is not terribly surprising to see the deferred soy contracts under downward pressure as well. May soybeans slipped 2.0 cents to $14.095/bushel late Wednesday morning, while May soyoil lost 0.06 cents to 48.92 cents/pound, but May soybean meal rose $3.0 to $404.4/ton.
After slipping in early trading, wheat futures apparently rebounded on weather news Wednesday morning. Our weather consultants predicted that the Red River Valley flood anticipated this spring will be the latest ever, which may have similar implications for spring wheat plantings across the Northern Plains. Meanwhile, some forecasters are anticipating lows in the low 20’s in western Kansas Thursday night. Such talk very likely boosted Kansas City futures. May CBOT wheat futures advanced 10.5 cents to $7.14/bushel just before lunchtime Wednesday, while May KCBT wheat surged 9.75 cents to $7.575 and May MGE futures rose 8.0 cents to $8.1775.
Cattle futures proved surprisingly strong Wednesday morning, especially when viewed in light of concurrent equity losses and U.S. dollar strength. That is, it was quite common for the cattle market to move in tandem with stock indices in recent years, so this latest divergence suggests that relationship is weakening. We suspect talk of cash and/or wholesale strength later this week supported prices this morning. June cattle rallied 1.02 cents to 121.47 cents/pound in late Wednesday morning action, while December added 0.82 cents to 126.70. May feeder cattle futures moved 0.37 cents higher to 140.42 cents/pound, but August gained 0.52 cents to 147.00.
Hog futures climbed strongly Wednesday morning. Belated talk of seasonal cash and wholesale strength may have boosted the market in the face of equity losses and dollar gains. Wire service sources also suggested the advance was exaggerated by the early-session nearby futures push above technical resistance associated with their short-term moving averages. May hog futures gained 0.80 cents to 87.60 cents/pound around midday Wednesday, while the June contract climbed 0.90 cents to 89.92.