Outside factors boosted the ag markets Tuesday. Equity markets surged again this morning, whereas the U.S. dollar fell sharply. Both moves are usually viewed as supportive of commodity demand and prices, which largely explains Tuesday’s big futures surge. Talk that China may allow the markets to exert more influence over its domestic ag prices also seemed bullish for corn. March corn rallied 16.0 cents to $3.8575/bushel at Tuesday’s close, while July added 15.5 to $4.01.
The soy complex posted a broad advance as well. Today’s combination of equity index and energy sector gains and U.S. dollar weakness apparently spurred strong soy buying. Deflationary ideas seemingly went out the window, as did concerns about large South American crops. The soy demand outlook does seem promising at this point, although wire service sources cited technical buying for much of the rally. March soybean futures soared 27.5 cents to $9.87/bushel in late Tuesday action, while March soyoil advanced 0.39 cents to 30.80 cents/pound, and March meal vaulted $12.7 to $340.6/ton.
The wheat markets also surged Tuesday. Equity strength, dollar weakness and the Chinese news also appeared to encourage wheat bulls. But the golden grain rally was doubly impressive since it occurred soon after U.S. wheat was shut out of the latest Egyptian tender. Wire service stories also cited technical buying for abetting the rise. March CBOT wheat ended Tuesday having surged 21.0 cents to $5.1375/bushel, while March KC wheat jumped 24.5 to $5.59/bushel, and March MWE wheat leapt 22.0 to $5.76.
Cattle futures came back from early losses. Last Friday’s bearish Cattle inventory report seemed to continue weighing on cattle futures this morning, since it suggested significantly larger fed cattle supplies during the coming months. However, wholesale beef prices rose strongly at noon, while bullish action in the outside markets lent spillover support. April live cattle futures rebounded 0.97 cents to 150.57 cents/pound as Tuesday’s CME pit session ended, while August cattle climbed 0.35 cents to 141.97 cents/pound. Conversely, March feeder cattle futures dove 1.20 cents to 199.50 cents/pound and May feeders fell 1.17 to 200.45.
Hog futures ended Tuesday on a mixed note. Chicago traders and many in the hog/pork industry continue looking for a seasonal price bounce, but spot prices have persistently refused to bottom. Deferred futures kept sliding today, but the expiring February future posted a sizeable bounce. That probably reflected the discount already built into the CME quote. April hog futures closed down 0.05 cents to 70.87 cents/pound Tuesday, while June hogs slumped 0.50 cents to 82.62.
Cotton futures appeared to break out to the upside. The cotton market had recently proven surprisingly strong despite bearish old crop fundamentals and chart resistance. However, today’s generally bullish environment seemingly spurred fresh ICE buying, especially after the March contract topped the pivotal 60-cent level. March cotton futures vaulted 1.56 cents to 61.45 cents/pound at Tuesday’s ICE settlement, while the July contract ran up 1.31 to 62.28.