Financial news and events seemed to depress commodities Friday. U.S. GDP during the last quarter of 2014 fell short of expectations, which sent most financial and commodity markets lower. The news may delay any Fed moves to raise interest rates, thereby undercutting the dollar. Deflationary news out of Europe may also have weighed on the ag markets. CBOT corn declined despite a reduced private estimate of Brazil’s crop and firm gulf quotes. March corn slipped 1.5 cents to $3.70/bushel Friday afternoon, while July sagged 1.75 to $3.86.
Brazilian currency losses apparently spurred CBOT soy losses. A surprisingly large deficit run up by Brazil’s government and a Brazilian official’s statement that the country is unlikely to support the real sent the currency sharply lower versus the dollar this morning. The implicit drop in the cost of Brazilian beans and products sent CBOT meal and soybean futures tumbling. Conversely, news of a big Pakistani purchase of U.S. soyoil and today’s crude rebound apparently supported soyoil. March soybean futures dropped 7.25 cents to $9.61/bushel at Friday’s close, while March soyoil rallied 0.46 to 30.00 cents/pound, whereas March meal dove $8.0 to $329.9/ton.
Wheat futures may have been reacting to Russian news. The same factors dragging the corn market lower seemed to depress wheat as well. We also wonder if traders were reacting to a report that Russian wheat destined for Egypt is stuck in Russian ports despite Sunday’s deadline for imposing its export tax. Egypt will apparently be exempt from the fee. Wire service reports simply cited technical factors and the long-standing global supply glut. March CBOT wheat tumbled 5.0 cents to $5.0275/bushel as the closing bell sounded Friday, while March KC wheat sagged 3.75 to $5.4025/bushel, and March MWE wheat sank 2.5 to $5.5675.
Cattle futures rallied in the face of widespread weakness. Despite the breakdown suffered by the equity and crop markets Friday, live cattle futures posted substantial gains as the day passed. The fact that country cattle prices edged upward from $159.00 to $160.00/cwt yesterday probably accounts for the strength, since it suggested a short-term low has formed. February live cattle futures advanced 1.32 cents to 154.85 cents/pound in late Friday action, while April cattle surged 1.77 cents to 152.27 cents/pound. March feeder cattle futures leapt 1.62 cents to 205.20, and May feeders vaulted 1.42 cents to 206.12.
Mixed spot news caused similar CME hog action. Major pork losses have exerted considerable pressure upon nearby hog futures this week. The cash markets firmed Thursday, thereby offering early support. However, today’s midday quotes broke the pattern, with cash prices dropping and pork quotes rebounding. Those seemingly explain the divergence at the CME as well. February hog futures dropped 1.07 cents to 67.47 cents/pound as Friday’s pit session ended, while June hogs climbed 0.47 cents to 84.10.
Cotton futures seemingly followed equities lower Friday. Cotton futures set back from Thursday’s modest gains last night, with traders seeming unimpressed with the market’s reaction to yesterday’s outstanding export result. The fact that the equity markets turned sharply lower today also seemed negative for the fiber market. March cotton futures ended the week having declined 0.21 cents to 59.36 cents/pound, while the July contract fell 0.44 to 61.08.