U.S. dollar strength may have exaggerated crop losses Tuesday. Talk of improving South American weather probably undercut the corn and soybean markets today, since that improves production prospects. However, the fact that the U.S. dollar broke out to a fresh four-year high couldn’t have helped markets that rely heavily on export sales. March corn futures dropped 8.5 cents to $3.8125/bushel in late Tuesday trading, while July sank 8.25 to $3.9675.
The soy complex also proved surprisingly weak. As in the corn market, the prospect of favorable South American conditions apparently depressed the soybean market. Meal was relatively firm, but the combination of U.S. dollar strength and crude oil weakness sent the soyoil market to fresh lows. Having Jan beans close below its 40-day MA and the pivotal $10.00 level looks technically bearish. January soybean futures fell 21.25 cents to $9.9575/bushel at Tuesday’s settlement, while January soyoil plunged 1.08 cents to 31.28 cents/pound, and January meal slid $4.1 to $357.9/ton.
The wheat markets moved generally lower. Talk of restrictions on Russian wheat exports, along with widespread talk of production problems in the Black Sea region and Australia have boosted wheat futures lately. However, prices turned mostly lower today. South American weather probably isn’t a big factor, but the U.S. dollar advance likely won’t help U.S. wheat exporters. March CBOT wheat closed 3.5 cents lower at $6.0325/bushel Tuesday, while March KC wheat tumbled 12.00 cents to $6.5225/bushel and March MWE wheat dipped 5.25 cents to $6.325.
A Cargill beef recall may have sparked selling in the cattle pit. Monday’s cattle surge seemed to set the stage for a fresh bullish push, but prices reversed to the downside today. We suspect news that Cargill has recalled a sizeable amount of ground beef sold in Canadian WalMart stores triggered the reversal, despite the fact that the fed cattle market doesn’t have much to do with hamburger sales. February live cattle plunged 1.80 cents to 169.05 cents/pound as Tuesday’s CME pit session ended, and April tumbled 1.15 at 168.75. In contrast, January feeder cattle futures leapt 1.47 cents to 235.55 cents/pound and March feeders climbed 0.27 to 233.47.
Hog futures traded mostly lower. Demand concerns still seem to be weighing on the hog and pork complex, although traders also appear to be thinking early-2015 hog and pork supplies will fall short of the bearish totals implied by the September Hogs & Pigs report. That might explain the February contract’s comparative firmness. February hog futures ended Tuesday having risen 0.07 cents to 89.00 cents/pound, while June hogs dove 0.90 cents to 96.60.