Crop markets turned decidedly lower Wednesday. Traders partially cited U.S. dollar strength as one reason for today’s early weakness in the grain and soy complexes, but accelerated farmer selling was probably a larger factor. That is, with nearby corn futures bumping up against $4.00/bushel, producers are reportedly selling grain more aggressively this week. March corn settled 5.75 cents lower at $3.8375/bushel Wednesday afternoon, while July lost 6.0 to $3.995.
Farmer selling also seemed to sink the soy complex. Although soy demand, particularly for meal, apparently remains quite robust, soybean and product prices suffered a concerted decline Wednesday. As with corn, having spot quotes challenging the $10.00/bushel level was too good for many producers to pass up. Concurrent energy sector losses and early U.S. dollar strength probably exaggerated the CBOT selling. March soybean futures fell 12.0 cents to $9.9575/bushel at their Wednesday close, while March soyoil slumped 0.31 cents to 32.01 cents/pound, and March meal sagged $3.7 to $338.6/ton.
Egyptian news hit the wheat markets. News out of India and Russia, as well as arctic cold over the U.S. Plains seemingly supported the wheat markets Tuesday night. Anticipation of an Egyptian tender for U.S. wheat also encouraged bulls. That changed dramatically by midmorning, when Egyptian officials announced that they were cancelling the tender due to excessively high quotes from suppliers. Futures tumbled in response. March CBOT wheat dropped 7.0 cents to $5.2775/bushel in late Wednesday trading, while March KC wheat dove 14.25 cents to $5.48/bushel, and March MWE wheat dipped 6.75 to $5.82.
Spot market strength likely boosted CME cattle. Cash cattle prices posted an unexpected increase last week and choice grade beef quotes have subsequently advanced. Those events, as well as the cash market’s historical tendency to peak in the March-April period each year, made the discounts built into CME futures look too large. April cattle futures leapt 1.90 cents to 152.62 cents/pound in closing Wednesday action, while August cattle rallied 0.57 cents to 142.85 cents/pound. Meanwhile, March feeder cattle futures jumped 1.65 cents to 203.10 cents/pound and May feeders surged 1.27 to 201.35.
Hog traders seemed to be looking for proof of a bottom. Talk of fresh cash weakness and continuing losses by the CME lean hog index sent hog futures sharply lower again Tuesday. However, afternoon reports indicated much firmer cash and wholesale markets later in the day, with the sustained nature of that firmness suggesting the spot markets are finally trying to bottom. April hog futures ended Wednesday having risen 0.22 cents to 64.22 cents/pound, while June hogs advanced 0.87 to 79.25.
Tight certificated stocks are spurring cotton buying. Indian officials stated that country’s 2014/15 cotton production at 35.15 million bales overnight, which greatly exceeded the latest USDA figure at about 30.5 million. The fact that India exports only a modest portion of its crop may have limited the market impact of the news, but the real driver of today’s early cotton gains was very likely the greatly reduced level of stocks certified for delivery against ICE futures. March longs are probably squeezing short position holders. March cotton futures vaulted 0.82 cents to 64.62 cents/pound as Wednesday’s ICE session ended, while the July contract gained 0.86 to 65.72.