Affecting many markets, commodity and financial, was this morning’s confirmation that the European Central Bank (ECB) will begin a $70 billion/month bond-buying program (monetary easing) in March. This mimics the QE program the U.S. Federal Reserve used to support our economy over the last several years. A big impact is that the US Dollar rocketed higher to a 1.7 percent gain. This takes the US Dollar Index to a level not seen since September 2003. The US$ is about 18 percent stronger than it was on January 1, 2014. The effect of a stronger US Dollar is to make U.S. Exports more expensive to our foreign customers and to give most of our competitors an advantage in the global market. Thus, U.S. commodity futures were under pressure.

Outside the above currency impact, the crop fundamentals are fairly burdensome as the South American crops are looking big. Moisture conditions are improving for wheat in the southern Plains.

Live Cattle futures ended the day lower. The morning’s price gains were erased after Noon Central on renewed concern of weak cash cattle prices and a drop in boxed beef values. Choice carcasses dn 1.54 at 255.65; Select up 0.48 at 248.89. One good point is that February LC is at a sharp discount to cash, but cash has been chasing futures down the hill.

It didn’t take long to find out yesterday’s higher move for LH futures was not a “sign of a bottom”. LH futures posted sharp losses as the cash hog and pork markets weakened further. FOB Plant Pork dropped 2.34 to 84.70 with every primal cut lower in value with a severe loss in ham price.

Beef and pork markets are facing not only a strong US$ that hurts exports, but a rising supply of chicken. The 6-week average for egg sets is +2.7 pct. And average bird weight is higher than ever.

Corn Mar -4 384; Jly -3 399; Dec -2 413 Bean Mar -7 977; Jly -6 989; Nov -5 961 Meal unch 330 Oil -44 3197 Wheat Mar -3 534; Jly -3 541 KC -7 565; MGE -5 575 Oats unch 291 Rice -21 1116

LC Feb -40 15330; Apr -7 15180; Oct +5 14725 FC Jan +30 21600; Mar +102 20632; Aug +12 20952 LH Feb -75 7160; Apr -135 7287; Jun -100 8315 Milk Feb +18 1476; Mar +7 1439

US$ +1.7%

Dow +260 17814 SP +31 2063 NAS +83 4750 Tran +255 9144 VIX -2.45 16.40 -13%

WTI -127 4651 Brent -15 4888 Gas +1 133 NG -12 285 HO unch 164 Eth +1 140 Gold +9 1302 Slvr +15 1834

2-yr +.021 0.523% 5-yr +.036 1.372% 10yr +.021 1.872% 30yr +.006 2.444%

Read today’s KFB Legislative Report No. 2 by clicking HERE.  

KENTUCKY CASH GRAIN PRICES – Click Here 

KENTUCKY LIVESTOCK AUCTIONS --  Click Here 

Subscribe to “Between the Rows” e-newsletter from the KFB Commodity Division by Clicking Here.