After rising the past two days, corn futures dipped Thursday morning. Nearly ideal weather remains a major impediment to bullish efforts in the crop markets at this point. But the main impetus for the decline suffered last night may simply have stemmed from a surge in the value of the U.S. dollar. That makes U.S. products more expensive on international markets and discourages demand. September corn futures slid 3.25 cents to $4.9575/bushel early Thursday morning, while December fell 4.75 cents to $4.7425.
Various factors explain divergent action in the soy complex Wednesday night. The expiring August contracts probably rose in response to old crop supply tightness again last night, whereas fine weather and large production prospects weighed upon deferred futures. Meanwhile, having the palm oil market rebound from multi-week lows appeared to spark a strong response from CBOT soyoil values. September soybean futures declined 0.5 cent to $12.4925/bushel just after dawn Thursday, while November beans were gained 0.5 cents to $12.0675. September soyoil jumped 0.58 cents to 42.67 cents/pound, while September soymeal sagged $0.1 to $403.9/ton.
Wheat futures were mixed in overnight trading. The golden grain markets may also have felt the negative impact of U.S. dollar strength. That would seemingly explain the mixed nature of Wednesday night trading despite widespread talk of vigorous export demand and quality problems in the U.S. winter wheat crop. September CBOT wheat slipped 1.25 cents to $6.63/bushel in early Thursday trading, and September KCBT wheat skidded 1.5 cents to $7.0525, while September MGE futures edged 0.25 cent lower to $7.41.
Live cattle futures declined in early Thursday trading. Although the cattle industry and traders expect a sizeable seasonal rally during the coming weeks and months, recent events make them wonder if the premiums already built into Chicago prices have fully anticipated the rise. Overnight U.S. dollar strength and Wednesday beef losses weren’t encouraging. October cattle were unchanged at 125.47 cents/pound as the sun rose over Chicago Thursday, while December inched down 0.25 cents to 128.35. September feeder futures gained 0.10 cents to 157.07 cents/pound, but November declined 0.27 cents to 159.77.
Hog futures bucked the downward trend Thursday morning. In contrast, to the cattle pit, deferred hog futures are trading at sizeable discounts to current cash values. Thus, recent firmness at the cash and wholesale levels appear to be offering significant support. October hog futures advanced 0.22 cents to 83.55 cents/pound in early Thursday action, while December climbed 0.25 cents to 80.75.
The dollar and Chinese news weighed upon cotton futures overnight. As in the other crop markets, the Wednesday night surge by the U.S. dollar seemed to weigh upon cotton futures. A Chinese report indicating that country had fallen short of planned sales from its massive inventories probably depressed prices as well. October cotton sank 0.32 cents to 85.31 cents/pound just after sunrise Thursday, while December lost 0.32 cents to 84.86.