Commodity markets sharply lower on Thursday

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Corn futures are strongly lower at midday. Outside markets are leading to a broad-based sell-off in commodity markets. The stock market and crude oil are sharply lower this morning, while the dollar index is up strongly. Supply and demand fundamentals are taking a back seat to outside markets this morning. Corn harvest continues to expand. As expected, yield reports have been all across the board. December is 20 cents lower at $6.65 3/4 and March is 19 3/4 cents lower at $6.79.

Soybean futures are sharply lower at midsession. The broad-based sell-off in commodities is being driven by outside market following the Wednesday afternoon announcement from the Federal Reserve of significant risks to the U.S. economy. The stock market and crude oil are sharply lower while the dollar index is higher. November futures have fallen below $13 for the first time since early August. November is 26 1/2 cents lower at $12.93 1/2 and January is 26 1/2 cents lower at $13.05.  

Wheat futures are trading solidly lower at midday. The market is being pressured by strength in the dollar and the sharp decline in the stock market following the Federal Reserve’s warning on Wednesday afternoon of significant risks for the U.S. economy. Technical selling was also noted after futures dipped below chart support. CBOT December is 14 3/4 cents lower at $6.52, KCBT December is 14 cents lower at $7.46 1/2 and MGE December is 10 1/2 cents lower at $8.30.  

Cattle futures are trading strongly lower at midsession. Sharp losses in equities and growing fear about a recession have led to fund liquidation in the cattle market. Boxed beef prices were solidly lower on Wednesday, which could weigh on this week’s cash market. Traders are also positioning ahead of the Cattle on Feed report due out Friday afternoon. The report is expected to show strong placements again in August. October is $1.73 lower at $117.53 and December is $1.88 lower at $116.98.

Lean hog futures are lower at midday. Profit-taking from recent gains was triggered by sharp losses in the stock market and strength in the dollar. Concern about economy was heightened following the Federal Reserve comments on Wednesday afternoon. However, front end losses are being limited by strength in pork cutout values and the firm tone in the cash market. Packer demand has so far kept pace with the rising number of market hogs. October is 53 cents lower at $88.75 and December is 95 cents lower at $83.15. Contracts for 2012 are down $1.50 to $2.00.



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