Financial news and events seemed to drive commodities Friday morning. U.S. GDP during the last quarter of 2014 fell short of expectations, which sent most financial and commodity markets lower. The news may delay any Fed moves to raise interest rates, which undercut the dollar. Deflationary news out of Europe may also have weighed on the ag markets. CBOT corn declined despite a reduced private estimate of Brazil’s crop and firm gulf quotes. March corn dipped 4.75 cents to $3.6675/bushel late Friday morning, while July slumped 5.25 to $3.825.
Brazilian currency losses are apparently depressing the soy complex. A surprisingly large deficit run up by Brazil’s government and a Brazilian official’s statement that the country is unlikely to support the real sent the currency sharply lower versus the dollar this morning. The implicit drop in the cost of Brazilian beans and products sent CBOT meal and soybean futures tumbling. Conversely, news of a big Pakistani purchase of U.S. soyoil and this morning’s crude firmness are apparently supporting soyoil. March soybean futures dropped 8.5 cents to $9.5975/bushel around midsession Friday, while March soyoil rallied 0.23 to 29.77 cents/pound, whereas March meal dove $7.4 to $330.5/ton.
Wheat futures may have been reacting to Russian news. The same factors dragging the corn market lower seemed to be working on wheat as well. We also wonder if traders are reacting to a report that Russian wheat destined for Egypt is stuck in Russian ports despite Sunday’s deadline for imposing its export tax. Egypt will apparently be exempt from the fee. Wire service reports simply cited technical factors and the long-standing global supply glut. March CBOT wheat tumbled 7.5 cents to $5.0025/bushel as the lunch hour loomed Friday, while March KC wheat sagged 3.75 to $5.4025/bushel, and March MWE wheat sank 3.0 to $5.5625.
Cattle futures are holding up well in the face of widespread weakness. Despite the breakdown suffered by the equity and crop markets, live cattle futures posted moderate gains this morning. The fact that country cattle prices edged upward from $159.00 to $160.00/cwt yesterday probably accounts for the strength, since it suggested a short-term low has formed. February live cattle futures advanced 0.70 cents to 154.22 cents/pound in late Friday morning action, while April cattle climbed 0.72 cents to 151.22 cents/pound. March feeder cattle futures jumped 0.82 cents to 204.40, and May feeders vaulted 1.00 cents to 205.70.
Firming cash quotes may also be supporting CME hogs. Major pork losses posted earlier this week have exerted considerable pressure upon nearby hog futures. However, the cash markets firmed Thursday and were called steady this morning. Those developments are apparently limiting losses in Chicago. February hog futures slid 0.30 cents to 68.25 cents/pound just before lunchtime Friday, while June hogs ran up 0.35 cents to 83.97.