The crop markets moved mostly lower overnight, with the lack of apparent threat to most crops, the elevated value of the U.S. dollar and sliding equity index futures seeming to combine to depress numerous commodities. The September futures dipped below the $4.00/bushel level overnight, but one has to wonder if bears also want to force a December futures test of that level as well. September corn futures declined 5.75 cents to $4.0075/bushel early Wednesday morning, while December lost 5.75 to $4.1175.
The soy complex couldn’t sustain Tuesday advance. Support around November soybean contract’s 20-day moving average seemed to hold yesterday, with the lack of change in underlying fundamentals abetting technical traders. There’s little fresh crop news today either, which may have exaggerated the impact of overnight losses in equity index futures and modest dollar strength. The November contract’s drop below its 20-day MA and the $10.00 level could encourage additional selling. August soybeans slid 6.75 cents to $10.12/bushel as Wednesday dawned over Chicago, while August soyoil slumped 0.12 cents to 31.81 cents/pound and August meal skidded $1.6 to $358.3/ton.
The wheat markets remained under downward pressure overnight. Traders seem keenly aware of the recent surge in the winter wheat harvest in the Plains, despite the problems the SRW crop is having in the southern and eastern areas of the Corn Belt. Good prospects for the spring wheat crop also seem to be weighing on grain quotes. The fact that U.S. wheat continues being shut out of foreign tenders isn’t helping the bullish cause. September CBOT wheat futures fell 7.25 cents to $5.175/bushel Tuesday night, while Sep KC wheat tumbled 5.5 cents to $5.125/bushel, and September MWE sank 6.25 cents to $5.5025.
Cash market pessimism apparently sank cattle futures Tuesday. Monday’s wholesale beef firmness might have signaled emerging firmness in the cattle and beef complex, but quotes were steady-weak at noon yesterday. Traders reportedly viewed the lack of bullish follow-through as signaling a fresh bout of cash weakness later this week, with futures clearly suffering as a consequence. Having the nearby August contract fail at 146-cent support probably exaggerated the decline. Afternoon beef slippage seems likely to weigh on today’s opening as well. August cattle ended Tuesday having tumbled 1.60 cents to 145.15 cents/pound, while December futures dove 1.37 to 149.77. Meanwhile, August feeder cattle futures plunged 3.25 cents to 213.07 cents/pound, and November feeders plummeted 2.95 to 208.27.
Diving cattle futures dragged deferred hog futures lower. Although Tuesday morning cash hog quotes came in modestly lower, pork cutout values had jumped sharply when reported at noon. That news almost surely powered the August futures gains seen Tuesday. However, suspicions that diving fed cattle prices will exaggerate the usual fall-winter breakdown in the hog and pork complex seemingly depressed the deferred swine contracts. The pork strength, as well as early-morning news of a big drop in pig weights last week seems likely to spark a strong opening. August hog futures surged 0.97 cents to 75.87 cents/pound at Tuesday’s CME close, while December dropped 0.75 cents to 59.75.
ICE cotton futures remained under pressure overnight. As in the other crop markets, there is little fresh news concerning fiber fundamentals, so traders are probably reacting to the sustained equity index slide and modest U.S. dollar gains posted in Tuesday night action. Underlying global fundamentals, prospects for strong U.S. yields and technical price action are also working against bulls. Still, the December contract probably enjoys modest chart support between the 63.00 and 64.00-cent levels. December cotton futures dipped 0.17 cents to 64.07 cents/pound in early Wednesday trading, while March slipped 0.05 cents to 64.12.