The weekly EIA report undercut corn futures. The weekly energy market report from the Energy Information Administration indicated reduced ethanol production and huge stockpiles last week, which bodes ill for corn demand from that sector. Having the U.S. dollar rise to its highest level since November 2003 doesn’t help export prospects either. March corn futures slumped 7.75 cents to $3.9725/bushel late Wednesday morning, while July dipped 7.75 to $4.125.
The soy complex proved rather mixed Wednesday morning. Talk of drying South American conditions boosted the soy complex overnight and probably continued offering background support this morning. But bulls proved unable to avoid setbacks in beans and meal as grain prices fell and the U.S. dollar surged. Soyoil proved relatively strong, thereby seeming to reflect the concurrent bounce in crude oil prices. March soybean futures dipped 1.25 cents to $10.545/bushel around midsession Wednesday, while March soyoil climbed 0.49 to 33.36 cents/pound, and March meal slid $2.3 to $352.8/ton.
Corn weakness and dollar strength seemed to undercut wheat prices as well. Although Arctic conditions over U.S. winter wheat areas are likely offering support for futures, particularly the CBOT & KCBOT contracts, golden grain prices followed corn lower this morning. Again, the surging value of the dollar can’t be encouraging industry bulls, especially since U.S. grain is already seen as overpriced by many. March CBOT wheat tumbled 9.0 cents to $5.8275/bushel as the lunch hour loomed Wednesday, while March KC wheat fell 8.5 cents to $6.2275/bushel, and March MWE wheat sagged 8.0 to $6.175.
Cattle and feeder futures turned mixed this morning. Packers are reportedly having to become more aggressive in bidding for cattle, since no one is terribly interested in getting out in current arctic conditions. Conversely, the surging U.S. dollar doesn’t favor the beef export situation either. Those competing factors may explains this morning’s mixed action in cattle and feeder futures. February live cattle edged up 0.22 cents to 166.25 cents/pound in late Wednesday morning trading, while April futures skidded 0.02 cents to 164.97. January feeder cattle futures climbed 0.87 cents to 225.57 cents/pound and March feeders rose 0.20 cents to 221.07.
Hog futures turned upward. Tuesday’s afternoon spot market reports held generally negative implications for today’s opening, so it wasn’t surprising to see CME prices open weakly. However, futures turned upward soon thereafter, which probably marked a response to talk of firm country cash and wholesale quotes. February hog futures bounced 0.57 cents to 79.15 cents/pound just before lunchtime Wednesday, while June hogs rallied 0.40 cents to 90.85.