Equity losses seemingly weighed on the crop markets Tuesday. A lack of news kept the crop markets narrowly mixed Monday night. However, the equity markets turned sharply lower this morning, thereby seeming to reflect investor disappointment with Microsoft and Caterpillar earnings announcements, as well as the results of the Greek election. The crop markets moved generally lower despite the concurrent drop by the U.S. dollar. March corn sagged 2.75 cents to $3.8125/bushel Tuesday afternoon, while July slumped 3.0 to $3.97.
The soy complex traded in decidedly mixed fashion. This morning the USDA daily trade reporting system indicated that 111,000 tonnes of soybeans had been sold to an ‘unknown destination’; that news was accompanied by another item saying China had canceled a 120,000-tonne sale. Those developments seemed to render beans and meal vulnerable to the broad selling. Soyoil quotes rose in response to an overnight bounce in palm values. March soybean futures fell 9.75 cents to $9.7375/bushel at their Tuesday settlement, while March soyoil bounced 0.09 to 31.17 cents/pound, whereas March meal slid $2.3 to $336.6/ton.
The wheat markets closed modestly lower. News of French wheat market weakness seemed to limit rally attempts in early trading, despite persistent reports of conflict in eastern Ukraine. Weather and conditions conducive to improved winter wheat crops also appeared to limit bullish interest. Actually, given the Tuesday morning equity breakdown, the wheat markets’ stability was rather impressive. March CBOT wheat closed down 1.5 cents to $5.19/bushel in late Tuesday action, while March KC wheat dipped 4.25 cents to $5.5025/bushel, and March MWE wheat skidded 2.5 to $5.665.
Cattle futures staged a big technical bounce. CME cattle traders had apparently anticipated the big beef losses posted Monday afternoon, since the Chicago market opened firmly in the face of that news. The fact that futures rallied strongly from that point suggests the industry views the recent breakdown as being greatly overdone. Technicians probably jumped on the bandwagon as well. February and April live cattle futures leapt the 3.00-cent daily limit to 152.82 and 151.00 cents/pound, respectively, at their Tuesday close. January feeder cattle futures tumbled 0.87 cents to 210.77, but March feeders soared 3.85 cents to 203.82.
The stock drop may have exaggerated losses in the hog pit. Chicago hog prices rallied strongly again on today’s opening, thereby seeming to reflect renewed optimism about the short-term outlook. However, futures reversed shortly after the opening and gave back a sizeable portion of the early advance. The stock market breakdown probably discouraged bulls, but the morning drop in pork values likely caused the reversal. February hog futures ended Tuesday having fallen 1.40 cents to 69.42 cents/pound, while June hogs dropped 0.62 cents to 81.57.
Equity losses seemed to depress ICE cotton. Monday’s big cotton rally despite a general lack of news was impressive. Futures set back significantly in reaction to the large breakdown suffered by the equity markets. Conversely, the concurrent U.S. dollar drop apparently helped bring the fiber market back at the close. March cotton futures rallied 0.16 cents to 58.78 cents/pound as Tuesday’s ICE session ended, while the July contract rose 0.10 to 60.40.