Corn edged higher again Tuesday morning. Despite the fact that the U.S. dollar index reached its highest level since spring 2006 seemingly did little to dampen bullish ideas in the crop markets. Traders apparently believe underlying demand strength will continue supporting those markets, although they also enjoy strong technical support at slightly lower levels. March corn futures gained 3.0 cents to $4.1475/bushel late Tuesday morning, while July added 2.5 to $4.2925.
The soy complex also posted a unanimous advance. Optimism about demand strength is apparently soybean meal and bean prices at this juncture, despite the prospect of another record Brazilian crop in early 2015. Ongoing palm oil gains, as well as rebounding energy prices boosted soyoil futures. Again, trading is light in pre-holiday action, while the nearby contracts are benefiting from major technical support at slightly lower levels. January soybean futures bounced 6.5 cents to $10.4475/bushel around midsession Tuesday, while January soyoil climbed 0.37 to 32.41 cents/pound, and January meal moved up $3.6 to $372.0/ton.
Talk of reduced Russian exports continues supporting wheat prices. There is little fresh news out of Russia, but traders obviously believe the Putin regime will curtail exports and create the need for grain from competitors. Futures reacted well again this morning, but one has to wonder if the ugly reversals posted last Friday and again yesterday, along with current U.S. dollar strength will cap rally efforts over the short run. March CBOT wheat advanced 9.75 cents to $6.355/bushel as the lunch hour loomed Tuesday, while March KC wheat ran up 7.5 cents to $6.6525/bushel and March MWE wheat rise 3.0 to $6.48.
Cattle futures are struggling once again. Unlike the crop markets, cattle and feeder futures are now bumping up against firm chart resistance associated with their short-term moving averages. Traders are apparently concerned about demand strength in the wake of the huge price gains posted through much of 2014. Seasonal factors are also working against bulls at this point. February live cattle slumped 0.67 cents to 160.15 cents/pound late Tuesday morning, while April futures fell 0.75 cents to 159.47. January feeder cattle futures plunged 2.50 cents to 218.00 cents/pound and March feeders plummeted 2.52 cent to 216.45.
Pork strength is probably supporting CME hogs. Cash hog prices have clearly taken a seasonal tumble lately and might continue sliding into early 2015. However, the ham market has not fallen as sharply as expected in the past few days, with the resulting rise in pork cutouts seemingly translating into fresh optimism about the short-term hog outlook. February hog futures leapt 1.50 cents to 81.75 cents/pound around lunchtime Tuesday, while June hogs jumped 0.95 cents to 90.02.
Cotton futures followed through on Monday’s big advance. With equity indexes hitting record highs Monday, cotton traders view the demand outlook with considerable optimism. However, the fact that ICE futures penetrated major moving average resistance yesterday almost surely played a big role in the follow-through gains posted this morning. Talk of reduced 2015 U.S. production is encouraging bulls as well. March cotton futures rallied 0.37 cents to 62.41 cents/pound just after noon (EST) Tuesday, while the July contract lifted 0.68 to 63.78.