US dollar strength once again weighed on the commodity sector Friday. A relatively high reading for Core-CPI on a Friday morning report sent the U.S. dollar higher, which in turn undercut the commodity markets. Actually, it wasn’t terribly surprising to see the corn setback, since the market had risen rather significantly lately despite generally bearish fundamentals, especially with the long weekend looming. July corn futures sank 5.0 cents to $3.60/bushel at Friday’s close, while December dipped 4.5 to $3.7775.
The soy complex also turned mostly lower. Signs of persistently firm demand for soybeans and meal have supported those markets lately and may partially explain the firmness exhibited by meal futures today. However, huge South American supplies and prospects for a strong start to the U.S. growing season remain obstacles for bulls. Today’s greenback rally and the downturn posted by the energy complex (which apparently includes soyoil these days) weighed on soybean futures. July soybean futures dove 14.25 cents to $9.2425/bushel at their week-ending settlement, while July soyoil fell 0.61 cents to 31.64 cents/pound, but July meal inched up $0.1 to $304.2/ton.
Technical selling may have exaggerated wheat losses. The wheat markets were threatening a breakout to the upside Thursday night, but proved unable to do so Friday. Thus, selling stemming from the dollar surge and generally negative old-crop supply conditions, as well as pre-weekend long liquidation, was probably exaggerated by the technical failure. July CBOT wheat futures closed 6.75 cents lower at $5.1525/bushel Friday, while July KC wheat plunged 11.25 cents to $5.465/bushel, and July MWE wheat tumbled 9.5 to $5.6875.
Cattle futures traded mixed Friday. Today’s U.S. dollar surge didn’t seem to greatly affect the cattle market, which probably reflects the reduction in exports over the past few years. Actually, many in the industry were surprised by the noon (EDT) release of the monthly USDA Cattle on Feed report (historically published at 3:00 PM). Low marketings and placements made for a mixed CME reaction, with deferred contracts tending to move upward in response to the latter result. June live cattle futures ended Friday having slipped 0.25 cents at 152.12 cents/pound, while August cattle stumbled 0.20 lower to 150.70. Meanwhile, August feeder cattle futures jumped 1.27 cents to 219.00 cents/pound, and November feeders vaulted 1.17 to 216.30.
Hog futures ended the week on a firm note. Today’s midsession cash and wholesale quotes proved quite weak, while the monthly USDA Cold Storage report indicated huge pork holdings in U.S. freezers. The fact that futures held up surprisingly well despite that news suggests considerable bearishness was already built into the market. The late day firmness was impressive. June hog futures slipped 0.05 cents to 83.72 cents/pound in late Friday action, while December inched up 0.05 to 70.25.