Outside events weighed on commodity markets Tuesday morning

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Outside events seemed to depress the crop markets Tuesday morning. U.S. dollar strength apparently weighed upon prices, since a rising greenback raises the cost of American products to international customers. Sliding European prices reportedly undercut values as well. Finally, investment bank Goldman Sachs announced around midmorning that it was lowering it commodity holding recommendation from overweight to neutral, which sparked broad futures market selling. May corn dipped 3.25 cents to $6.425/bushel around midsession Tuesday, while December fell 10.0 cents to $5.23.

Talk of extremely tight spot markets across the Midwest apparently supported nearby soybean and meal futures Tuesday morning, whereas deferred contracts and oil suffered significant losses. Negative developments in outside markets, along with concerns about future Chinese demand seemed to be undercutting those futures. May soybeans rose 9.75 cents to $14.27/bushel late Tuesday morning, while May soyoil sank 0.10 cents to 48.52 cents/pound, and May soybean meal climbed $4.7 to $414.7/ton.

Wheat futures apparently suffered from the same bearish influences depressing corn Tuesday morning. Traders also seem to believe the moisture provided by recent rains will improve spring wheat crops more than frosts have hurt winter wheat prospects. Still, the significant increases in the poor to very poor conditions on the Monday afternoon reports seem likely to support the Kansas City market. May CBOT wheat futures tumbled 5.75 cents to $6.965/bushel just before lunchtime Tuesday, while May KCBT wheat slipped 2.5 cents to $7.40 and May MGE futures lost 5.75 cents to $8.13.

Cattle traders seemed to be encouraged by the large equity gains posted Tuesday morning, but the reasons for the modest advance may have come from closer to home. That is, forecasts for warming weather next week suggest consumer beef demand will finally surge with the belated start to the spring grilling season. The wholesale gains posted Monday also seemed persuasive. June cattle surged 0.45 cents to 121.27 cents/pound in late Tuesday morning action, while December gained 0.17 cents to 126.32. The prospect of cheaper feed boosted the yearling market. May feeder cattle futures jumped 1.20 cents to 139.80 cents/pound, while August spiked 2.12 cents to 148.10.

The prospect of warmer weather and surging consumer demand during the spring grilling season apparently boosted CME lean hog futures Tuesday morning. The underlying optimism was probably exaggerated by the cash and wholesale gains posted Monday afternoon, especially with the industry looking for much more of the same during the days and weeks just ahead. May hog futures climbed 0.32 cents to 87.90 cents/pound around midday Tuesday, while the June contract advanced 0.65 cents to 90.10.

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