Financial markets are undercutting commodities. Renewed concerns about European Monetary Union and the euro have surged again this week, thereby spurring big U.S. dollar gains and sending stock indexes lower. Both of those reactions are seen as negative for commodity demand, which is probably a big reason corn futures fell this morning. The outsized wheat breakdown apparently weighed on corn as well. July corn futures slumped 5.0 cents to $3.55/bushel just before lunchtime Tuesday, while December lost 5.0 to $3.7275.
Argentina’s labor situation may be supporting the soy complex. The recent rebound in palm oil prices is probably boosting the U.S. soyoil market as well, but one has to wonder if the worsening Argentine labor situation is supporting the whole soy complex. Strikes at soy crushing plants and ports, have reportedly created a big backlog of ships at their ports, which in turn may be forcing buyers to look to the U.S. July soybean futures edged up 1.25 cents to $9.255/bushel late Tuesday morning, while July soyoil surged 0.35 cents to 31.99 cents/pound, and July meal rallied $1.6 to $305.8/ton.
Demand considerations seemed to overwhelm bullish wheat news. The rainfall pounding the southern and western Plains spurred fresh overnight gains in the KC and Minneapolis markets Monday night, but they turned downward in concert with Chicago quotes this morning. The breakdown likely had significant technical/pragmatic components, but it was rather clearly triggered by financial market developments. July CBOT wheat futures plunged 21.0 cents to $4.9425/bushel around midsession Tuesday, while July KC wheat dove 20.0 cents to $5.265/bushel, and July MWE wheat tumbled 14.5 to $5.5425.
Cattle futures are trading mixed. The CME cattle market seemingly posted a belated bullish reaction to last Friday monthly USDA Cattle on Feed report, but futures turned mixed around midsession. Concurrent U.S. dollar strength and diving equity markets probably weighed on prices due to their negative demand implications. This week’s beef outlook doesn’t look promising, but futures are already trading at big discounts to recent cash quotes. June live cattle futures stalled at 152.12 cents/pound as the lunch hour loomed Tuesday, while August cattle rose 0.27 to 150.97. Meanwhile, August feeder cattle futures advanced 0.87 cents to 218.97 cents/pound, and November feeders ran up 0.55 to 216.85.
Large supplies may be spurring active hog sales. Last week’s hog slaughter topped the comparable year-ago figure by 9.3%, thereby suggesting a relative increase in short-term hog and pork supplies. That news, along with the negative demand signals being sent by the financial markets seemed to weigh on the swine market to start the week. June hog futures sagged 0.30 cents to 83.45 cents/pound late Tuesday morning, while December declined 0.27 to 69.90.