The surging dollar seemed to depress the ag markets Tuesday. Monday’s USDA Crop Progress report stated U.S. corn plantings at 85% complete, which may have encouraged bears somewhat. In addition, the U.S. dollar rebounded rather dramatically from recent losses, thereby raising the implicit cost of U.S. goods to export customers. That apparently weighed upon the corn market. July corn futures closed 6.0 cents lower at $3.62/bushel Tuesday afternoon, while December lost 5.5 to $3.8025.
The soy complex also proved vulnerable to active selling. The Crop Progress report stated soybean planting progress at 45% complete as of Sunday. That result actually fell somewhat short of industry expectations. Moreover, the belated weekly Export Inspections report, as well as news of a big old-crop sale to China, also looked supportive of bean and product prices. But the dollar surge, as well as concurrent palm and crude oil losses seemed to drag the whole complex lower. July soybean futures fell 8.25 cents to $9.4625/bushel at Tuesday settlement, while July soyoil plunged 0.60 cents to 32.18 cents/pound, and July meal sagged $0.9 to $307.1/ton.
Wheat futures gave back much of Monday’s advance. The USDA wheat data indicated another improvement in winter wheat conditions, which ‘wrong-footed’ bulls looking for damage from excessive rains. When combined with recent news that Russia has lifted it export tariff and the big dollar surge, those factors sent exchange prices tumbling. July CBOT wheat futures dropped 11.5 cents to $5.1025/bushel in late Tuesday trading, while July KC wheat dove 15.00 cents to $5.40/bushel, and July MWE wheat slumped 10.25 to $5.6425.
Cattle futures bounced from technical support. CME traders apparently worry that grocer interest for Memorial Day is ending, thereby presaging a short-term drop in beef demand. That helps explain the big CME losses seen lately. Conversely, the wholesale market posted a huge Tuesday morning bounce, which clearly played a role in today’s rebound from moving average support. June live cattle futures bounced 0.40 cents to 151.97 cents/pound as the CME pit session ended Tuesday, while August cattle rallied 0.57 to 150.60. Meanwhile, August feeder cattle futures rose 0.42 cents to 217.15 cents/pound, and November feeders moved up 0.67 to 215.15.
Hog futures stabilized in the wake of early losses. The livestock/meat industry also seems pessimistic about short-term hog/pork prospects, as exemplified by the fact that the nearby June contract settled below the latest estimate for the CME Hog Index (which futures cash-settle against). That fact may be a big reason bears couldn’t force a downside follow-through from early losses. June hog futures ended Tuesday having declined 0.25 cents to 82.15 cents/pound, while December skidded 0.10 to 70.20.