The soaring dollar is still affecting commodities. Thursday’s news that the European Central Bank will follow the U.S. Fed’s recent policy of Quantitative Easing (buying huge quantities of EU government bonds) sent the value of the dollar soaring, which in turn depressed commodities due to the implicit increased cost on global markets. Corn futures held up rather well, but remains under downward pressure this morning. March corn slipped 1.5 cents to $3.8225/bushel Thursday night, while July lost 1.5 to $3.9775.
The soy complex traded narrowly mixed overnight. Little fresh soybean or product news emerged Thursday night, which probably explains the lack of movement in soy prices. Robust demand for beans and meal is apparently limiting the pressure being exerted by prospective South American crops. Meanwhile, surprising overnight gains in crude oil appeared to pull bean oil upward as well. March soybean futures skidded 1.25 cents to $9.755/bushel early Friday morning, while March soyoil rose 0.03 to 32.00 cents/pound, and March meal sagged $0.2 to $329.9/ton.
Wheat futures also remained under pressure. The dollar-driven increase in the cost of U.S. grain prices weighed on the wheat markets as well, although growing Russia-Ukraine conflict very likely limited the losses. Given the potential impact of the Black Sea situation, it was somewhat surprising to see wheat futures sliding farther this morning. Improved southern Plains moisture may be weighing on prices. March CBOT wheat slumped 6.0 cents to $5.2775/bushel in early Friday action, while March KC wheat slid 3.0 cents to $5.6175/bushel, and March MWE wheat dipped 3.25 to $5.7225.
Cattle futures closed narrowly mixed Thursday. Southern Plains cattle prices dipped $2-$4/cwt (cents/pound) from last week’s results yesterday morning. Packers probably went ahead due to big snowfall around Amarillo. CME futures climbed despite the cash news, possibly because traders expected larger country losses, but couldn’t sustain gains in the face of the surging dollar. Afternoon GLOBEX trading suggests persistent weakness this morning. February live cattle futures closed 0.35 cents lower at 153.35 cents/pound Thursday, while the April contract skidded 0.07 cents to 151.80. January feeder cattle futures gained 0.27 cents to 215.97, and March feeders climbed 1.02 to 206.32.
CME hogs suffered a sharp bearish reversal. A sizeable Wednesday surge in Iowa hog prices sparked early gains in CME hog futures Thursday. But midsession spot reports pointed much lower. Having the U.S. dollar spike and suggest pork exports will be damaged probably added to the subsequent price drop. Afternoon spot market weakness implies further losses on the opening. February hog futures tumbled 0.75 cents to 71.60 cents/pound at Thursday’s settlement, while June hogs dove 1.00 cent to 83.15.
A Chinese story seemed to boost cotton futures. Recent talk of commodity deflation apparently exaggerated the impact of the surging U.S. dollar on cotton futures Thursday, thereby more than offsetting the bullish implications of the big equity surge. But fiber values bounced overnight, which probably marked a response to a report that China will lower it’s the target price for farmer cotton amidst a domestic surplus. That suggests they might buy more U.S. product next year. March cotton futures rallied 0.29 cents to 58.05 cents/pound as the sun rose over New York Friday, while the July contract gained 0.20 to 59.78.