Corn futures continue tracking movements in soybeans, bounding in concert with the legume market overnight after having accompanied it lower Wednesday. Shifts in South American weather forecasts and other considerations seem to be affecting these markets at this point, with the Wednesday night gain likely marking a response to yesterday’s big equity market rebound and continued losses in the value of the dollar. Those developments seem conducive to improved domestic and export demand, respectively. March corn futures rose 2.25 cents to $3.7375/bushel early Thursday morning, while the May contract gained 2.0 to $3.78.
Improving South American weather forecasts apparently weighed heavily upon the soy complex Wednesday, as did an industry forecast for a larger Argentine bean crop. Bulls may also have been bailing out of longs established on Tuesday’s seeming technical breakout. The drop was probably limited by the concurrent US dollar breakdown, since that move may make US beans and products more affordable for foreign customers. The continued greenback slide apparently played a role in the overnight rebound. March soybean futures improved 4.0 cents to $8.8075/bushel Wednesday night, while March soyoil edged 0.6 cents higher to 31.04 cents/pound, and March meal was lifted $1.9 to $272.0/ton.
The Egyptian and Russian situations continue affecting the wheat markets to some extent, but the breakdown in the value of the US dollar seems to be dominating golden grain prices at this juncture. That is, the greenback’s elevated value against numerous international currencies, especially those of Argentina and Russian have weighed on prices for some time, so the ongoing dive is encouraging many in the wheat sector. March CBOT wheat moved up 2.0 cents to $4.82/bushel in predawn Thursday action while March KC wheat rallied 2.5 to $4.71, while March MWE added 2.5 to $5.03.
Live cattle futures rallied Wednesday, with bull spreading enabling the front months to lead the way higher. Stressful feedlot conditions after winter storms on the Central Plains and Midwest have traders optimistic about this week's cash cattle trade prospects. Nearby contracts aretrading in line with last week's cash trading range. Meanwhile the product market continues to raise concerns about demand, as mixed prices of late have failed to spur an uptick in movement. April live cattle climbed 1.00 full cent to 135.75 cents/pound at Wednesday’s close, while June futures gained 0.35 cents to 125.07. March feeder cattle edged up 0.10 cents to 157.95 cents/pound and May feeders added 0.35 cents to 156.65.
Lean hog futures rose in concert with cattle, finishing at or near their daily highs. Sharp early losses in the U.S. dollar index reportedly exaggerated the price strength due to optimism about export prospects. Cash hog bids were steady to firm as packers work to refill operations following the disruption in movement due to the winter storm in the western Corn Belt. Wednesday’s slaughter was estimated at 395,000 head, down from 438,000 a week ago and down from 429,000 a year ago. The three-day total is down 13% from a week earlier and down 9% from a year ago, but much of the shortfall could be made up this weekend. Modest cash gains and sizeable wholesale losses seemingly make for a weak opening today. April hog futures closed up 0.57 cents to 69.67 cents/pound Wednesday, while June hogs advanced 0.67 to 80.52.
Pessimism about the cotton export outlook and the expiring March contract’s failure at 40-day moving average resistance apparently triggered Wednesday’s breakdown. The drop seemed particularly weak when viewed within the context of the big afternoon comeback by the equity indexes and the early breakdown by the US dollar. The losses continued overnight, which probably reflected Wednesday’s price action and the export situation as much as anything else. March cotton fell 0.52 cents to 61.42 cents/pound in early Thursday trading, while May cotton dropped 0.48 cents to 61.93 cents/pound.