The weekly EIA report undercut corn futures. The weekly energy market report from the Energy Information Administration indicated reduced ethanol production and huge stockpiles last week, which bodes ill for corn demand from that sector. Having the U.S. dollar rise to its highest level since November 2003 doesn’t help export prospects either. March corn futures slumped 8.75 cents to $3.9625/bushel Wednesday afternoon, while July dropped 8.75 to $4.115.
The soy complex proved rather mixed Wednesday. Talk of drying South American conditions boosted the soy complex Tuesday night and probably continued offering background support this morning. But bulls proved unable to avoid setbacks in beans and meal as grain prices fell and the U.S. dollar surged. Soyoil proved relatively strong, thereby seeming to reflect the concurrent bounce in crude oil and equity prices. March soybean futures closed up 0.5 cent at $10.5625/bushel Wednesday, while March soyoil climbed 0.29 to 33.16 cents/pound, but March meal slid $1.1 to $354.0/ton.
Corn weakness and dollar strength seemed to depress wheat prices as well. Although Arctic conditions over U.S. winter wheat areas likely offered support for futures Wednesday, golden grain prices followed corn lower. Again, the surging value of the dollar could hardly be seen as encouraging industry bulls, especially since U.S. grain is already overpriced by numerous standards. March CBOT wheat tumbled 12.25 cents to $5.795/bushel as the closing bell range Wednesday, while March KC wheat fell 11.25 cents to $6.20/bushel, and March MWE wheat sank 9.75 to $6.1575.
Cattle and feeder futures moved mostly lower Wednesday. Beef packers have reportedly become more aggressive in bidding for cattle, since no one is terribly interested in getting out in current arctic conditions. Strong noon beef prices also seemed supportive of CME futures. Conversely, the surging U.S. dollar doesn’t favor the beef export situation. Otherwise, the reason for today’s generally cattle weakness wasn’t obvious. February live cattle slipped 0.12 cents to 165.90 cents/pound in late Wednesday trading, while April futures sagged 0.27 cents to 164.72. January feeder cattle futures surged 0.95 cents to 225.65 cents/pound, whereas March feeders stumbled 0.55 cents to 220.32.
Hog futures turned upward. Despite persistent reports of spot market weakness early in the new year, CME hog futures rebounded strongly from opening losses. The bounce probably marked a response to talk of seasonally firming country cash and wholesale quotes. February hog futures advanced 0.75 cents to 79.32 cents/pound at Wednesday’s CME close, while June hogs gained 0.40 cents to 90.90.
Financial markets seemed to affect cotton futures Wednesday. Cotton traders usually view shifts in the equity indexes as indicators of future economic growth and demand potential, so today’s rebound in stock index futures seemed to translate into modest cotton gains. The advance was probably limited by the resumption of the recent U.S. dollar surge, since that implies a rise in the cost of U.S. cotton to export customers. March cotton futures ended Wednesday having risen 0.23 cents to 60.43 cents/pound, while the July contract added 0.16 to 61.88.