Financial markets are again depressing commodity markets. The U.S. dollar surged again Monday night, while equity index futures fell sharply in response to ideas that the Fed will soon boost U.S. interest rates. The commodity markets are suffering a general decline as a consequence, with gold leading prices lower. Talk of firm demand does seem to be limiting losses in the corn market. Traders may also be reluctant to sell aggressively prior to the release of today’s 11:00 AM CDT USDA Supply/Demand (WASDE) report. May corn futures slipped 1.25 cents to $3.875/bushel Monday night, while December lost 1.0 to $4.1175.
The soy complex posted across-the-board losses Monday night. The rising dollar implicitly boosts the cost of U.S. goods on international markets, while stock losses hold negative implications for the domestic outlooks, neither of which is favorable for commodity demand. That’s a big reason soybean and product prices also declined overnight. Asian palm slippage didn’t help the soyoil market, but underlying meal demand seemed to limit losses in that pit. May soybean futures fell 5.0 cents to $9.8825/bushel early Tuesday morning, while May soyoil stumbled 0.14 cents to 30.86 cents/pound, and May meal skidded $1.5 to $332.6/ton.
The wheat markets seemed to fail at moving average resistance. The same negative demand implications stemming from dollar strength and stock losses also affected the wheat markets overnight. Bulls also proved unable to push the nearby contracts above technical resistance associated with their 10-day moving averages. May CBOT wheat slumped 4.75 cents to $4.8525/bushel in early Tuesday trading, while May KC wheat slid 4.25 cents to $5.2625/bushel, and May MWE wheat sank 3.75 to $5.57.
Cattle futures couldn’t sustain early Monday gains. A late-Friday surge in cash cattle prices spurred a strong Monday opening in live cattle futures, but bulls couldn’t sustain the breakout attempt. The subsequent decline reemphasized the industry’s apparent lack of confidence about the spring outlook. Nearby futures seem likely to open weakly this morning. April cattle futures settled 0.65 cents lower at 154.00 cents/pound Monday afternoon, while August cattle stumbled 0.25 cents to 144.57 cents/pound. Meanwhile, April feeder cattle futures slipped 0.17 cents to 208.40 cents/pound, and August feeders slid 0.47 to 208.65.
Cash hog losses seemingly weighed on CME prices Monday. The early-March surge in cash hog prices ran out of momentum late last week, so CME traders appeared to be anticipating seasonal weakness into early spring yesterday. Neither extremely large supplies, nor Monday morning cash slippage were encouraging. Late cash quotes came in lower, which seemingly bodes rather ill for the CME hog opening. April hog futures skidded 0.05 cents to 66.07 cents/pound as Monday’s CME pit session ended, while June hogs tumbled 0.75 to 79.30.
Cotton traders may be balancing positions ahead of the USDA report. ICE cotton futures have posted some substantial moves on minimal news lately, which may mean traders are rather heavily committed to one or both sides of the market. Thus, position squaring ahead of the midday (EDT) WASDE report would seem in order. That might explain the May contract’s slight overnight advance. May cotton edged up 0.01 cents to 62.26 cents/pound around sunrise Tuesday, while December futures dipped 0.03 to 63.92.