The crop markets remained weak Tuesday night. The rebounding U.S. dollar apparently depressed the commodity markets yesterday, since a more valuable greenback increases the implicit cost of U.S. goods to export customers. The simple fact that the world grain and soy markets are well supplied and the emerging U.S. crop seems likely to be quite large may also be weighing on corn prices. July corn futures slipped 0.75 cent to $3.6125/bushel early Wednesday morning, while December lost 1.25 to $3.79.
Soybeans and meal are suffering from renewed pressure. Ideas that current U.S. growing conditions favor a strong start to the soybean crop seem to be dragging the soy complex lower these days. Big South American supplies aren’t helping the bullish cause either, nor is the latest U.S. dollar resurgence. Oil futures did bounce overnight in concert with crude and palm oil quotes, which may have brought bean prices off their overnight lows. July soybean futures dropped 5.25 cents to $9.41/bushel Tuesday night, while July soyoil rebounded 0.14 cents to 32.32 cents/pound, and July meal sank $2.8 to $304.3/ton.
Ukraine news may have undercut wheat quotes overnight. The ongoing dollar rally is probably weighing on wheat futures as well, especially since American grain is generally viewed as being expensive by export customers. Also, Ukraine officials boosted their forecast for their 2015 production by 2.0 million to 60 million tonnes. Conversely, continued rainfall over U.S. winter wheat areas suggests potential crop damage and underlying price support. July CBOT wheat futures slid 3.5 cents to $5.0675/bushel shortly after sunrise Wednesday, while July KC wheat sagged 3.5 cents to $5.365/bushel, and July MWE wheat dipped 2.25 to $5.62.
Cattle futures bounced from technical support Tuesday. CME traders apparently worry that grocer interest for Memorial Day is ending, thereby presaging a short-term drop in beef demand. That helps explain the big CME losses seen lately. Conversely, the wholesale market posted a huge Tuesday bounce, which clearly played a role in the CME rebound from moving average support. Steady-firm GLOBEX trading suggests a similar opening today. June live cattle futures bounced 0.40 cents to 151.97 cents/pound as the CME pit session ended Tuesday, while August cattle rallied 0.57 to 150.60. Meanwhile, August feeder cattle futures rose 0.42 cents to 217.15 cents/pound, and November feeders moved up 0.67 to 215.15.
Hog futures stabilized in the wake of early losses. The livestock/meat industry also seems pessimistic about short-term hog/pork prospects, as exemplified by the fact that the nearby June contract settled below the latest estimate for the CME Hog Index (which futures cash-settle against). That fact may be a big reason bears couldn’t force a downside follow-through from early losses. Sizeable pork gains seemingly presage a firm opening. June hog futures ended Tuesday having declined 0.25 cents to 82.15 cents/pound, while December skidded 0.10 to 70.20.
Cotton futures began Wednesday on a mixed note. The July cotton contract failed at its 50-day moving average Tuesday, but has subsequently seemed to find support at its 200-day MA. The rallying U.S. is apparently weighing rather heavily upon the fiber market, since so much American product is exported. Traders also seem worried about the economic outlook and apparel demand. The December contract bounced slightly overnight, which is rather impressive given the greatly improved Texas moisture situation. July cotton slipped 0.08 cents to 64.27 in early Wednesday action, while December futures edged up 0.08 to 64.91.