The resurgent dollar is hurting the crop markets. Crop futures moved mostly higher Thursday night on general demand optimism. Domestic bullishness was probably justified by the early morning Employment report, but the strong U.S. dollar response to that news looks negative for export prospects. Greenback strength implicitly raises the cost of U.S. goods on foreign markets. March corn sank 4.25 cents to $3.81/bushel late Friday morning, while July lost 3.75 to $3.9675.
The soy complex also turned lower Friday morning. Asian palm oil prices continued rising Thursday night in response to Indonesia’s announcement of increased subsidies for biodiesel producers. Given the concurrent crude oil strength, soybean and product markets reacted well. However, bulls couldn’t sustain those gains in the face of the big Employment-driven U.S. dollar surge. Technical prospects also seem rather negative as well. March soybean futures slumped 8.75 cents to $9.725/bushel as the lunch hour loomed Friday and March soyoil dropped 0.16 cents to 31.55 cents/pound, while March meal skidded $2.6 to $328.8/ton.
The wheat markets held up relatively well. Although the surging dollar also caused a reversal in wheat futures, those losses looked quite modest when compared to those suffered by corn. One has to suspect Thursday’s talk of Egyptian buying is continuing to support golden grain prices. Futures also bounced from their 10-day moving average soon after the Employment report. March CBOT wheat slipped 1.0 cent to $5.2475/bushel around midsession Friday, while March KC wheat slid 2.25 to $5.6175/bushel, and March MWE wheat fell 5.25 to $5.7375.
Cash firmness may be supporting cattle futures. The latest wholesale news has seemed rather bearish for the short-term cattle outlook, especially if recent talk that packers aren’t able to export fresh, chilled product due to gridlock at the West Coast ports. However, cash prices proved generally stable at midweek, thereby seeming to encourage CME bulls. April live cattle futures leapt 1.72 cents to 149.75 cents/pound in late Friday morning action, while August cattle jumped 1.00 cents to 142.00 cents/pound. Meanwhile, March feeder cattle futures spiked 2.25 cents to 197.90 cents/pound and May feeders soared 2.02 to 198.50.
Hog traders seem to think recent losses are overdone. The cash and wholesale markets remain quite weak amid talk of stunted exports due to the West Coast port situation. However, simply having the severity of the ongoing drop explained, with the prospect of a reversal when new port worker contracts are signed, may have encouraged many in the industry. April hog futures surged 1.70 cents to 67.97 cents/pound shortly before lunchtime Friday, while June hogs vaulted 1.82 to 79.87.
Cotton futures traded sideways Friday morning. Surprisingly strong exports and expectations for big 2015 production cutbacks reportedly powered the recent cotton rally. Nearby futures seemed to seemed to encounter resistance as they neared their December highs overnight. Still, the fact that they did not move much lower as the dollar surged this morning was impressive. March cotton futures slid 0.20 cents to 61.59 cents/pound just before noon (EST) Friday, while the July contract dipped 0.23 to 61.91.