Dollar gains continue weighing on the crop markets. Wire service reports suggest demand from traditional customers is offering persistent support for U.S. corn. But others are reportedly being driven away by high prices, with the rising values of the U.S. dollar exacerbating the situation. The greenback moved to fresh highs overnight. May corn futures slid 2.25 cents to $3.8825/bushel early Friday morning, while December lost 2.5 to $4.115.
Soy meal remained comparatively firm overnight. As with the grains, the climbing value of the dollar is tending to undercut soy export prospects, along with CBOT prices. Of course, the outlook is also suffering from the South American harvest and the big increase in global supplies. Still, this week’s palm oil losses are weighing on soyoil, whereas vigorous demand seems to be supporting meal quotes. May soybean futures skidded 0.5 cent to $9.85/bushel in early Friday action, while May soyoil dropped 0.14 cents to 31.43 cents/pound, but May meal rose $0.8 to $326.0/ton.
The wheat markets may see short covering before the weekend. The ongoing U.S. dollar rally has apparently taken a greater toll on the wheat market than its counterparts, due in part to the global glut and the relative expense of American grain. Thus, prices have fallen rather sharply this week. However, they traded narrowly mixed overnight, which may reflect traders squaring positions before the weekend. May CBOT wheat gained 1.25 cents to $4.8175/bushel Thursday night, while May KC wheat inched up 1.75 cents to $5.1875/bushel, and May MWE wheat sagged 1.0 to $5.575.
Cattle futures struggled Thursday after opening strongly. As expected, cattle futures opened sharply higher in the wake of Wednesday’s big advance. However, bulls couldn’t sustain the gains in nearby futures, thereby suggesting the industry remains quite doubtful of beef demand strength this spring and summer. Mixed beef quotes and afternoon GLOBEX slippage suggest a weak Friday morning opening. April cattle futures settled 0.78 cents lower at 153.27 cents/pound Thursday afternoon, while August cattle skidded 0.22 cents to 144.15 cents/pound. Meanwhile, April feeder cattle futures jumped 1.00 cent to 205.37 cents/pound, and August feeders vaulted 1.55 to 206.92.
CME hogs also ran into resistance Thursday. Wednesday’s rally in nearby April hog futures was impressive, since it suggested renewed industry optimism despite recent spot weakness. Bulls proved unable to build upon the rally yesterday, which almost surely reflected spreading reports of sizeable pork losses. The swine market also seems likely to open poorly this morning. April hog futures dropped 1.17 cents to 66.82 cents/pound as Thursday’s CME pit session ended, while June hogs tumbled 1.15 to 80.40.
Dollar strength is also depressing the cotton market. Yesterday’s weekly USDA Export Sales report indicated that cancellations dominating last week’s cotton trading, which was hardly conducive to bullish ideas about the outlook. Traders also seem to suspect that the recent 20% rally in expiring March futures will encourage spring planting and diminish the major cutbacks previously anticipated. Having the dollar marching higher certainly isn’t helping the bullish cause either. May cotton dipped 0.05 cents to 63.18 cents/pound shortly after sunrise Friday, while December futures slumped 0.19 to 64.55.