U.S. dollar weakness boosts ag markets on Tuesday

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Corn futures were part of the general agricultural market advance in response to ongoing U.S. dollar weakness. For example, the long-standing U.S. dollar index was trading at its lowest levels since late February late Tuesday morning, thereby increasing the value of dollar-denominated commodities on the international markets. Tight old crop tightness and concerns about the weather outlook may have supported the corn market as well. July corn futures surged 9.75 cents to $6.595/bushel around midsession Tuesday, while December rose 5.5 at $5.515.

Soybean futures also appeared to benefit from greenback weakness Tuesday morning, but traders also cited the tight old crop situation for boosting the nearby July contract. The new crop situation is also rather tenuous, which may partially explain the modest gains posted by deferred futures. July soybean futures jumped 17.5 cents to $15.2925/bushel late Tuesday morning, while July soyoil gained 0.08 cents to 48.15 cents/pound, and July soybean meal added $10.8 to $459.1/ton.

The general agricultural market advance also carried the wheat market higher Tuesday morning. Again, U.S. dollar weakness is probably playing a role in the rise, as are concerns about the size of the forthcoming winter and spring wheat crops, since Great Plains weather has not been particularly cooperative during the first half of 2013. July CBOT wheat futures climbed 9.0 cents to $6.9875/bushel just before lunchtime Tuesday, while July KCBT wheat advanced 6.25 to $7.325, while July MGE futures rallied 7.5 cents to $8.19.

After struggling to rebound overnight, CME live cattle futures belatedly surged in response to the wholesale strength indicated on the Monday afternoon beef report. That apparently improved industry confidence about the likely outcome of cash trading later this week, and during the weeks ahead, since futures had rallied strongly by late morning. June cattle advanced 0.95 cents to 120.15 cents/pound just before lunchtime Tuesday, while December lifted 0.92 to 125.35. August feeder cattle futures increased 1.07 cents to 144.50 cents/pound, and November surged 0.77 cents to 150.07.

Optimism about the short-term outlook dominated the hog pit again Tuesday, with the July contract once again proving most responsive. The June future had jumped 1.15 cents to 100.35 cents/pound just before noon, despite the fact that it expires Friday and the CME lean hog index is current estimated at 97.96 cents/pound. There was no confirmation of the Monday morning rumor of resurgent Chinese export interest. June hog futures spiked 1.15 cents to 100.35 cents/pound around midday Tuesday, while December bounced 0.27 cents to 81.02.



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