Crop markets turned decidedly lower Wednesday morning. Traders partially cited U.S. dollar strength as one reason for today’s early weakness in the grain and soy complexes, but accelerated farmer selling was probably a larger factor. That is, with nearby corn futures bumping up against $4.00/bushel, producers are reportedly selling grain more aggressively this week. March corn sank 6.0 cents to $3.835/bushel around midsession Wednesday, while July lost 6.25 to $3.9925.
Farmer selling also seemed to sink the soy complex. Although soy demand, particularly for meal, apparently remains quite robust, soybean and product prices suffered a concerted decline this morning. As with corn, having spot quotes challenging the $10.00/bushel level was too good for many producers to pass up. Concurrent energy sector losses and U.S. dollar strength probably exaggerated the CBOT selling. March soybean futures fell 15.75 cents to $9.92/bushel late Wednesday morning, while March soyoil slumped 0.32 cents to 32.00 cents/pound, and March meal sagged $5.0 to $337.3/ton.
Egyptian news hit the wheat markets. News out of India and Russia, as well as arctic cold over the U.S. Plains seemingly supported the wheat markets Tuesday night. But anticipation of an Egyptian tender for U.S. wheat also encouraged bulls. That changed dramatically by midmorning, when Egyptian officials announced that they were cancelling the tender due to excessively high quotes from suppliers. Futures tumbled in response. March CBOT wheat dropped 10.25 cents to $5.245/bushel just before lunchtime Wednesday, while March KC wheat dove 13.75 cents to $5.485/bushel, and March MWE wheat dipped 9.25 to $5.795.
Spot market strength is probably boosting CME cattle. Cash cattle prices posted an unexpected increase last week and choice grade beef quotes have subsequently risen. Those events, as well as the cash market’s historical tendency to peak in the March-April period each year, make the discounts built into CME futures look too large. That very likely explains the cattle and feeder gains posted this morning. April cattle futures climbed 0.92 cents to 151.65 cents/pound in late Wednesday morning trading, while August cattle rallied 0.27 cents to 142.55 cents/pound. Meanwhile, March feeder cattle futures jumped 1.27 cents to 202.72 cents/pound and May feeders surged 0.82 to 200.90.
Hog traders seem to be looking for proof of a bottom. Talk of fresh cash weakness and continuing losses by the CME lean hog index sent hog futures lower again Tuesday. However, afternoon reports indicated much firmer cash and wholesale markets later in the day, with the sustained nature of that firmness suggesting the spot markets are finally trying to bottom. Traders aren’t convinced. April hog futures declined 0.25 cents to 63.75 cents/pound as the lunch hour loomed Wednesday, while June hogs inched 0.20 to 78.17.