Dollar strength continues weighing on the crop markets Wednesday night. Grain prices slipped in Wednesday night trading, with corn seeming to follow wheat modestly lower. The soy complex was mixed. Having the U.S. dollar hit a fresh 11-year high again last night implicitly raised the cost of American commodities to export customers, which clearly does not favor export demand. May corn futures slipped 1.0 cent to $3.885/bushel early Thursday morning, while December sagged 1.25 to $4.125.
The soy complex proved decidedly mixed overnight. U.S. dollar gains aren’t making American soybeans and products more attractive to export customers, especially with huge South American becoming more readily available. Nevertheless, beans and meal showed signs of early-morning strength, whereas a big overnight palm oil reversal weighed on soyoil quotes. May soybean futures edged 0.5 cent lower to $9.935/bushel Wednesday night, while May soyoil slumped 0.15 cents to 32.06 cents/pound, but May meal rose $0.3 to $327.6/ton.
The wheat markets continued Wednesday’s decline. Current U.S. dollar strength is obviously hurting wheat export prospects, especially with the golden grain already viewed as being comparatively expensive. The FAO also boosted its global wheat and cereal production and carryout forecasts overnight, thereby adding to the selling pressure. May CBOT wheat slid 3.0 cents to $4.93/bushel in early Thursday action, while May KC wheat dipped 1.0 cent to $5.2625/bushel, and May MWE wheat skidded 1.25 to $5.645.
Cattle futures rebounded sharply from early lows. Tuesday’s bearish momentum carried cattle futures sharply lower upon yesterday’s opening, but the fact that the cash and wholesale markets remain strong, and that the former are priced well above nearby futures, apparently powered a drastic rebound after April futures tested support in the 150-cent/pound area. Afternoon beef quotes were mixed, but a bullish follow-through seems very likely. April cattle futures leapt the 3.00-cent daily limit to 154.05 cents/pound Wednesday, while August cattle vaulted 2.30 cents to 144.37 cents/pound. Meanwhile, April and August feeder cattle futures soared their 4.50-cent limit to close at 207.22 and 205.37 cents/pound, respectively.
Hog futures also came back from Wednesday morning lows. Recent signs of weakness in the cash hog and wholesale markets had depressed CME hog futures, although the losses weren’t as large as suggested by some reports. That may be one reason CME hogs rebounded strongly from today’s early losses. Although cash prices reportedly stalled yesterday, afternoon pork gains bode well for today’s opening. April hog futures ended Wednesday having jumped 2.40 cents to 68.00 cents/pound, while June hogs surged 1.02 to 81.55.
The cotton market couldn’t build upon Wednesday’s late comeback. Big equity market losses and dollar gains depressed cotton futures yesterday morning. Still, the fiber market came back strongly and closed only slightly lower. We wondered if traders expected a good result on today’s Export Sales report, but the fact that prices slipped again overnight added no credence to that idea. May cotton declined 0.11 cents to 63.49 cents/pound Wednesday, while December futures lost 0.16 to 64.87.