Strength in the U.S. dollar index is providing widespread pressure to the commodity markets this morning after much-anticipated manufacturing data out of China and the euro-zone showed the global economy continues to slow. Also this morning, the U.S. government says 382,000 people filed first-time jobless claims last week, which was worse than expected and is expected to weigh on the U.S. stock market this morning.
Corn futures are 1 to 4 cents lower on negative outside markets and disappointing weekly export sales.
- Strength in the U.S. dollar index weighed on corn overnight, with additional pressure coming from this morning's weekly export sales data that showed just 69,900 metric tons (MT) in sales last week -- falling well short of expectations.
- Mostly clear weather across the Corn Belt is advancing harvest and weighing on the cash market, although yield results continue to be a disappointment.
- December corn is pivoting around $7.50 this morning -- remaining within the boundaries of the gradual downtrend from the summer high.
Soybean futures are 1 to 10 cents lower on profit-taking. Soymeal and soyoil are seeing spillover pressure.
- A lack of fresh positive news and negative outside markets is weighing on soybean futures this morning.
- Weekly soybean sales of 712,200 MT for 2012-13 and 5,500 MT for 2013-14 were within expectations, with China and unknown destinations (likely China) the lead buyers. Continued solid demand reminds traders the market has yet to find a price that dramatically slows use.
- November soybeans rose above $16.80 earlier, but have softened and are now pivoting around $16.60.
Chicago and Kansas City wheat are posting slight losses while Minneapolis wheat is mixed with a downside bias.
- Wheat is seeing spillover from neighboring pits and negative outside markets, but pressure is being limited by global weather concerns.
- This morning's extended weather outlook from the U.S. Climate Prediction Center calls for the persistence of drought across the Plains, which raises concerns about establishment of the winter wheat crop.
- Weekly wheat sales of 488,900 MT were within expectations.
Live cattle futures are expected to see a choppy start as traders wait on cash cattle trade to begin.
- The beef market has improved this week. Choice values were up 65 cents yesterday to rise near the $195-per-cwt. level. But while this week's showlist is smaller than last week, packers are hesitant to raise bids due to negative profit margins, leading to cash uncertainty.
- A slowdown in beef exports is discouraging to market bulls. Weekly beef sales of 10,900 MT were down 35% from the previous week and 33% below the four-week average.
- Negative outside markets will limit buying, as traders worry a global economic slowdown will further impact U.S. beef exports.
Lean hog futures are expected to favor a firmer tone due to expected strength in the cash hog market.
- The cash hog market is expected to be steady to firmer this morning, which should support lean hog futures. However, packers' profit margins have tightened considerably this week.
- Pork cutout values are nearing a two-year low, but traders hope recent strength in futures and firmer cash hog bids will generate improved interest in pork among retailers.
- October lean hog futures hold around a $7 premium to the cash hog index as traders anticipate the worst is behind in terms of pork production.