Financial market action is apparently depressing the ag markets. News that Argentine farmers are planning a three-day selling strike to protest government policies might have supported U.S. grain and soy markets overnight, since that might shift buyer interest back to the U.S. However, the ag markets have suffered general losses today, which probably reflects another equity market setback and concurrent U.S. dollar index gains to a fresh 11-year high, both of which are negative for demand. May corn futures dipped 3.5 cents to $3.875/bushel in late Wednesday morning trading, while December lost 4.75 to $4.1175.
The soy complex posted across-the-board losses Wednesday morning. Although Brazil’s transport problems appear to be easing, overnight news of the planned Argentine farmer strike seemed quite supportive of bean and meal futures. Nevertheless, the soy markets accompanied the grains lower as equity indexes sank and the dollar climbed last night. The complex remained weak all morning. May soybean futures fell 16.25 cents to $9.96/bushel just before lunchtime Wednesday, while May soyoil tumbled 0.76 cents to 32.21 cents/pound, and May meal slid $4.8 to $328.0/ton.
Wheat markets have given back Tuesday’s gains. Farmer selling to meet March 1 bills reportedly played a big role in recent wheat losses, whereas the end of that selling apparently powered yesterday’s futures rally. However, bulls couldn’t build upon Tuesday’s strong advance overnight, due in part to the fact that export prospects remain poor. Having the dollar surge to fresh highs is also reminding traders of the relative expense of U.S. wheat. May CBOT wheat dove 10.0 cents to $4.96/bushel around midsession Wednesday, while May KC wheat sank 7.5 cents to $5.2775/bushel, and May MWE wheat slumped 9.0 to $5.6175.
Cattle futures rebounded strongly from early lows. As expected Tuesday’s bearish momentum carried cattle futures sharply lower upon today’s opening. However, the fact that the cash and wholesale markets remain strong, and that the former are priced well above nearby futures, apparently powered a strong rebound after April futures tested the 150-cent/pound level. April cattle futures surged 1.25 cents to 152.30 cents/pound late Wednesday morning, while August cattle gained 0.40 cents to 142.47 cents/pound. Meanwhile, April feeder cattle futures leapt 1.65 cents to 204.37 cents/pound, and August feeders vaulted 1.62 to 202.50.
Hog futures have also come back from early lows. The cash hog and wholesale markets were generally weak Tuesday, although the losses weren’t as large as suggested by midday reports. That may be why CME hogs also rebounded from sharply lower opening losses. The fact that the April contract is now priced below the CME index may also have spurred buying. April hog futures advanced 0.85 cents to 66.45 cents/pound as the lunch hour loomed Wednesday, while June hogs rose 0.02 to 80.55.