Corn futures reportedly dropped Wednesday morning in response to persistent U.S. dollar strength and profit-taking by those with previously established long positions. The rising greenback tends to make U.S. goods more expensive for foreign buyers. The weekly report from the Energy Information Administration (EIA) did not help the bullish cause, since it showed ethanol activity had recently slowed significantly. May corn fell 9.0 cents to $705.25/bushel around midsession Wednesday, while December lost 5.75 cents to $5.515.
Soybean futures also fell sharply Wednesday morning, with traders again blaming dollar strength and profit-taking in the wake of recent gains. The market may have been hurt by recent talk of slowing Chinese buying as well. The breakdown may have included a technical component, especially after the most-active May contract fell below its 10-day moving average. May soybeans had fallen 25.25 cents to $14.435/bushel late Wednesday morning, while May soyoil dipped 0.66 cents to 49.32 cents/pound, and May meal dove $7.7 to $428.5/ton.
Wheat futures were seemingly dragged downward by corn and soybeans Wednesday. However, the modest degree of those losses was rather impressive, particularly when viewed within the context of recent losses. Indeed, given the recent firmness exhibited by the wheat markets, it would be easy to assume the market has found equilibrium around current levels. May CBOT wheat futures slipped 0.75 cents to $7.0275/bushel as lunchtime loomed Wednesday, while May KCBT wheat edged 1.0 cent lower to $7.3425, and May MGE futures lost 4.5 cent to $7.87.
Cattle futures rose in anticipation of short-term cash and wholesale strength Wednesday morning. Cutout values rose modestly Tuesday and might continue doing so through the middle of next week, when grocers will probably have completed the bulk of their purchases for early-April features. The resulting improvement in their margins could cause beef packers to pay up for fed cattle through mid-March. April cattle rallied 0.67 cents to 129.37 cents/pound in late Wednesday morning action, while August edged upward 0.17 cents to 125.45. Meanwhile, April feeder cattle jumped 1.00 cent to 143.20 cents/pound, and August advanced 1.10 cents to 152.32.
Slipping hog futures Wednesday morning apparently illustrated industry pessimism about the short-term outlook. Country markets were called firm in early trading, but the industry is rather clearly suspicious of their ability to sustain gains during the balance of March. The fact that the CME lean hog index will probably slip 0.01 cent to 77.49 cents/pound tomorrow, which almost four cents discount to the April contract price is not encouraging either. April hogs slid 0.12 cents to 81.32 cents/pound around lunchtime Wednesday, while June skidded 0.65 cents to 90.40.