Dollar strength depressed most commodities Friday. The monthly Employment report looked quite favorable, thereby suggesting the Fed will soon begin raising domestic interest rates. That interpretation not only depressed the equity markets, it sent the dollar soaring and badly undercut the commodity sector. The corn market was no exception. May corn futures sank 4.5 cents to $3.86/bushel at Friday’s settlement, while December lost 3.25 to $4.1075.
Soy meal again diverged from sliding bean and oil quotes. As with most commodity markets, the surging U.S. dollar is undercutting soy export prospects, along with CBOT prices. Of course, the bean and product outlook is also suffering from the South American harvest and the resulting surge in global supplies. Nevertheless, vigorous demand still seems to be supporting meal quotes. May soybean futures slipped 0.5 cent to $9.85/bushel late Friday afternoon, while May soyoil fell 0.29 cents to 31.28 cents/pound, whereas May meal gained $2.5 to $327.7/ton.
The wheat markets ended the week on a mixed note. Wheat futures suffered substantial losses this week as U.S. dollar strength, the global glut and the relative expense of American grain depressed sentiment. However, prices proved generally mixed to steady Friday, which seemingly reflected pre-weekend short-covering and bargain hunting by aggressive bulls. May CBOT wheat gained 2.0 cents to $4.825/bushel in late Friday trading, while May KC wheat ran up 5.25 cents to $5.2225/bushel, but May MWE wheat sagged 2.0 to $5.565.
Talk of cash strength boosted cattle futures. Late Thursday news of steady Nebraska cattle trading probably supported CME futures this morning. Moreover, one has to suspect rising packer bids or expectations of the same powered the afternoon surge. Indeed, post-session news of active trading at $162/cwt (up $3-$4 from last week) suggest a big follow-through surge on Monday’s opening. April cattle futures closed 1.37 cents higher at 154.65 cents/pound Friday, while August cattle rallied 0.78 cents to 144.92 cents/pound. Meanwhile, April feeder cattle futures soared 3.20 cents to 208.57 cents/pound, and August feeders leapt 2.20 to 209.12.
CME hogs continued struggling. After rallying strongly in response to the West Coast port settlement, the cash hog markets apparently ran out of upward momentum this week, due largely to concurrent pork weakness. Traders likely expect pork demand to surge in the weeks ahead, but short-term prospects seem less than promising. April hog futures ended Friday having declined 0.70 cents to 66.12 cents/pound, while June hogs stumbled 0.35 to 80.05.
The financial market moves also depressed the cotton market. Cotton futures did not perform well this week, so it wasn’t terribly surprising to see prices continue sliding Friday. That is, both the surging value of the dollar and dropping equity indexes pointed to reduced cotton/apparel demand from international and domestic users, respectively. The market looks technically weak as well. May cotton settled down 0.26 cents to 62.97 cents/pound Friday, while December futures sagged 0.17 to 64.57.