Commodities, Stocks Tumble on Tuesday
Lean hog futures faced substantial losses as the outside market selloff added to pressure from unseasonably soft pork prices. April hog futures closed off 0.62 cent, or 0.7%, to 83.80 cents a pound in trading at the Chicago Mercantile Exchange. CME June hog futures fell 0.25 cent, or 0.3%, to 93.35 cents a pound. Unseasonable weakness in government wholesale pork prices added pressure during the session.
U.S. live cattle futures faced sharp losses Tuesday as a broad slide in stocks and commodities added to building concerns over red meat demand. April cattle closed down 1.62 cents, or 1.4%, to $1.1775 a pound in trading at the Chicago Mercantile Exchange. June cattle fell 1.47 cents, or 1.3%, to $1.1430 a pound. April feeder cattle traded lower by 0.7% at $1.4707 a pound.
Wheat futures tumbled to one-week lows as well, succumbing to broader-based selling. The sharp drop in wheat prices was surprising based on reduced U.S. and world ending stocks and higher feeding estimates from USDA, said Jack Scoville, analyst with Price Futures Group in Chicago. Wheat was dragged lower by corn, with ample world supplies and improved crop conditions for developing winter wheat crops keeping buyers cautious, Scoville added. CBOT May wheat ended down 17 1/4 cents at $6.25 3/4 per bushel, May KCBT wheat ended 19 cents lower at $6.41, and May MGEX wheat ended down 13 1/4 cents at $8.33 3/4.
U.S. soybean futures ended lower Tuesday, succumbing to profit-taking pressure after futures rose to new seven-month highs. U.S. Department of Agriculture confirmed the smaller supply outlook in reports Tuesday morning, a feature that initially propelled futures to new highs. CBOT May soybeans ended 5 cents lower at $14.26 a bushel, after setting a new seven-month high of $14.52 1/4 earlier in the session.
Cotton futures ticked up Tuesday after a mixed USDA supply/demand report that was bullish for the US market but bearish globally as the agency boosted its season-ending stocks forecast 5.7% to what would be a record high. But with 35% of stocks tied up in China's reserves, analysts say the USDA numbers are misleading. In addition, "very timely beneficial pre-planting rains" in west Texas, the top US producing region, capped today's gains, says independent analyst Mike Stevens. ICE cotton for May delivery settled 0.3% higher at 89.73c/pound.
Crude-oil futures prices settled at a two-month low Tuesday, pressured by fresh worries over signs of slowing Chinese oil demand. The world's second-biggest oil consumer after the U.S. reported a drop in oil imports in March, albeit from a record-high February level. Light sweet crude for May delivery on the New York Mercantile Exchange settled $1.44, or 1.4%, lower at $101.02 a barrel, the lowest level since Feb. 14. Nymex heating oil for May delivery settled 1.6%, or 5.02 cents lower, at $3.0957/gallon, the lowest level since Feb. 2. Reformulated gasoline blendstock futures fell 1.4%, or 4.71 cents, to $3.2496 a gallon, the lowest since March 6.
Natural gas futures tumbled more than 3% Tuesday to within striking distance of the $2 psychological threshold, as demand for the fuel used for heating continues to wane in the face of elevated production. Natural gas for May delivery settled 7.6 cents, or 3.6%, lower at $2.031 a million British thermal units on the New York Mercantile Exchange.
Gold rose for a third consecutive session on Tuesday after a late-session bounce, as some investors moved to the yellow metal amid mounting losses in equities markets and lingering hopes for continued Federal Reserve support for the economy. The most actively traded contract, for June delivery, rose $16.80, or 1%, to settle at $1,660.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
Recent weakness in stocks picked up steam Tuesday thanks to renewed worries about Europe and lack of optimism about the upcoming earnings season. The Dow lost 213 points to close at 12715. Nasdaq lost ground as well, falling 55 to 2991. The S&P plummeted 23 points to close at 1358