Oh, Friday the 13th, you never fail to bring bad news:
First today we received report of Japan increasing its corn purchases from Brazil and Ukraine. Who can blame them? With prices lower than U.S. supplies, the Japanese are sure to increase their purchases elsewhere. Prices $10 per metric ton cheaper in Ukraine and Brazil seem to be the best bet. Bloomberg reports imports from the U.S. may drop 20 percent next quarter amid slowing Japanese demand, putting a drag on corn futures. The shift toward Brazilian grains has accelerated as the real fell to a record low vs. the dollar in September, making Brazil more competitive in the world market. Overall corn demand is shrinking in Japan as high feed costs are forcing inefficient farmers to quit production, leading to a drop in the nation’s cattle herd.
Then, we saw the volatility in the the livestock markets. Meat futures struggled at midday, especially cattle contracts. Cattle and hog futures posted new contract lows amid the highly choppy price action and finished lower for the week.
Last, but not worst, U.S. stocks declined for a third straight session today. MarketWatch reported the benchmark S&P 500 has declined in seven of the past eight sessions and is on track to record its biggest weekly loss since the week ended Sept. 4, The benchmark index has turned negative for the year after Thursday’s selloff, down more than 1%.
Commodity markets took a tumble this week on the strong dollar and Chinese demand fears, with major lows for copper, gold, crude oil and zinc. Soybean and wheat markets remained weaker, and again the U.S. Dollar being higher by 55 points, today, didn’t help. Thus, brutal end to Friday the 13th in the commodity sector.