Financial markets affected commodity futures Tuesday morning

Big equity losses are weighing on the ag markets. The weekly USDA Crop Progress indicated the corn harvest was farther along than expected, which weighed on CBOT futures in early trading. However, today’s sustained weakness probably represents a commodity reaction to big early losses in the equity markets, since those imply a weak demand outlook. December corn futures dipped 3.75 cents to $3.5325/bushel late Wednesday morning, while May slumped 4.25 cents to $3.7475.

Soybean and oil futures are also under pressure. The Crop Progress stated the soybean harvest advanced 20% last week, which was much farther along than many expected. Today’s equity index and crude oil losses are likely weighing on beans and soyoil, whereas the dollar drop is probably cushioning the bearish impact. Talk of firm demand is apparently boosting meal. November soybean futures sagged 2.75 cents to $9.62/bushel around midsession Wednesday, while December soyoil fell 0.37 cents to 32.50 cents/pound, but December soymeal moved up $0.6 at $324.6.

The wheat markets are proving surprisingly firm. The Crop Progress report had little impact upon the wheat outlook, which left futures open to outside influences. Thus, early corn, bean and stock losses probably weighed on prices. However, the belated break in the value of the dollar seemed supportive, since that makes U.S. gain more competitive on global markets. December CBOT wheat bounced 3.25 cents to $5.125/bushel as lunchtime loomed Wednesday, while December KC wheat surged 5.75 cents to $5.96/bushel, and December MWE wheat gained 6.0 to $5.7025.

Equity losses are probably weighing on cattle futures as well. Cattle futures traded firmly Tuesday night, possibly due to the sizeable gain posted by choice beef cutout Tuesday afternoon. However, continued equity losses are seemingly weighing on the market today, since such a big stock drop bode ill for the economic outlook and red meat demand. December live cattle futures edged up 0.10 cents to 164.02 cents/pound late Wednesday morning, while April futures lost 0.50 to 162.40. Meanwhile, November feeder dove 2.00 cents to 235.15 cents/pound, while January feeders plunged 1.92 to 229.20.

Big pork losses are weighing on hog futures. The cash hog markets declined modestly Tuesday, but late-day reports showed pork cutout had plummeted over 4.0 cents/pound. That weakness and its negative seasonal implications have translated into big CME losses today. December hogs crashed 2.62 cents to 92.30 cents/pound just before the lunch hour Wednesday, while April tanked 2.30 to 89.70.