The crop markets moved mostly lower in concert with equity indexes Thursday night. Corn futures ended Thursday little changed, with the nearby March contract seeming stuck between its 10 and 20-day moving averages. The yellow grain actually defied the generally bearish atmosphere in overnight action, which may have reflected weather model changes suggesting diminished late January rainfall over South American fields. March corn futures inched up 0.5 cent to $3.585 in predawn Friday action, while May added 0.5 cent to $3.63.
The soy complex set back overnight. The concurrent dive in equity index futures and the nearby crude oil contract’s push below the $30/barrel level probably discouraged commodity bulls. The bean decline may also have marked a reaction to the expiring January soybean contract’s inability to sustain a moved above the psychologically important $9.00 level during the past two sessions. The crude oil drop seemed to drag soyoil downward as well. March soybean futures declines 5.25 cents to $8.77 Thursday night, while Mar soyoil fell 22 points to 29.53 cents per pound and March meal sank $3.6 to $270.6.
Chicago and Minneapolis wheat continued their midweek slide Thursday after having failed at pivotal resistance associated with their respective 40-day moving averages Tuesday afternoon. The weakness persisted in overnight action, but an early-morning data release from the USDA’s Farm Service Agency seemingly encouraged bulls. The data apparently applied to spring 2015 plantings rather than fall winter wheat seedings, but the market still appeared to react. March CBOT wheat rose 0.5 cent to $4.6925 per bushel in early Friday trading, while March KC wheat slipped 0.25 cent to $4.6825 and March MWE gained 0.5 cent to $4.93.
Demand concerns on high beef prices pressured cattle futures to a 2 ½ week low. Keeping prices from further decline is a continued cash market firmness. Investors look for signals concerning demand as packer margins have grown, thereby depressing futures from 2 month highs reached early this month. Weakening equity markets are bleeding into the cattle market as traders worry about risk and weak beef demand. Beef Cutouts remained firm, with choice cutout rising 0.24 to 235.45 cents/pound and Select cuts climbing 1.27 to 230.35. February live cattle lost 1.55 cents to 130.550 cents/pound Thursday, while April futures dipped 1.53 cents to 131.50. March feeder cattle declined 2.43 cents to 154.775 cents/pound and April feeders lost 1.93 cents to 155.350.
Hogs early on looked determined to fall off, but firm cash markets on strong packer margins supported futures for a steady rebound from early morning lows. US Pork packer margins for Thursday are +$36.81 vs +$32.08 on Wednesday. Higher packer margins have firmed cash bids for hogs. Although hog and pork fundamentals remain quite positive, the premiums to the CME index already built into futures prices make rallies from recent levels problematic. That may also be why hog futures seem sensitive to equity markets shifts, as exemplified by the late-session slide, since the bullish outlook at least partially depends upon persistently robust demand from both the domestic and export sectors. Country hogs backed off on Thursday, but pork cutouts surged. February hog futures closed 0.73 cents/pound higher at 62.350 cents/pound Thursday, while April hogs rose 0.63 cents to 67.775 cents/pound.
Cotton traders continue paying close attention to events in the equity markets due to the general believe that general stock movements reflect consensus views concerning the intermediate-term economic outlook and forthcoming demand shifts. Thus, the midweek fiber rally wasn’t terribly surprising. However, the March ICE contract failed at 10-day moving average resistance during the past two sessions, which almost surely encourage traders to actively sell the market when equity index futures dove Thursday night. March cotton tumbled 0.24 cents to 61.66 cents/pound early Friday morning, while May cotton dropped 0.32 to 62.06 cents/pound.