The soaring dollar sank the commodity markets Thursday. The European Central Bank announced that it will follow the U.S. Fed’s recent policy of Quantitative Easing (buying huge quantities of EU government bonds) in an effort to boost European economies. The U.S. dollar leapt on the news, thereby raising the comparative price of American goods on global markets. As one might expect, the crop markets reacted poorly to the shift. Corn was certainly no exception. March corn futures ended Thursday having slumped 4.25 cents to $3.8375/bushel, while July slid 3.25 to $3.9925.
The soy complex moved mostly lower as well. Optimism about the demand outlook seemed to support soybean and meal futures Wednesday night, but futures reversed this morning. The surging value of the dollar, which boosted the implicit cost of those goods to export customers very likely caused the reversal. Sizeable crude oil losses also weighed upon the soyoil market. March soybean futures fell 6.75 cents to $9.7675/bushel at their Thursday settlement, while March soyoil dropped 0.44 to 31.97 cents/pound, and March meal dipped $0.4 to $330.1/ton.
Wheat futures also turned lower. The dollar-driven increase in U.S. grain prices didn’t help the wheat markets either, especially with so many in the industry already regarding U.S. wheat as being too expensive for international customers. However, the Russia-Ukraine conflict seemed to escalate somewhat Wednesday night, which explains the early rally in wheat futures as limited losses posted by the golden grain markets. March CBOT wheat edged 3.0 cents lower to $5.3375/bushel in late Thursday action, while March KC wheat sank 7.5 cents to $5.6475/bushel, and March MWE wheat sagged 5.5 to $5.755.
Cattle futures closed narrowly mixed. Southern Plains cattle prices dipped $2-$4/cwt (cents/pound) from last week’s results this morning. Packers probably went ahead due to big snowfall around Amarillo. CME futures climbed despite the cash news, possibly because traders were expecting larger spot market losses, but couldn’t sustain gains in the face of the dollar surge. February live cattle futures closed 0.35 cents lower at 153.35 cents/pound Thursday, while the April contract skidded 0.07 cents to 151.80. January feeder cattle futures gained 0.27 cents to 215.97, and March feeders climbed 1.02 to 206.32.
CME hogs suffered a sharp bearish reversal. A sizeable Wednesday surge in Iowa hog prices sparked early gains in CME hog futures today. But midsession spot reports pointed much lower. Having the U.S. dollar spike and suggest pork exports will be damaged probably added to the subsequent price drop. February hog futures tumbled 0.75 cents to 71.60 cents/pound at Thursday’s settlement, while June hogs dove 1.00 cent to 83.15.