The FOMC (Federal Reserve) raised its target interest rate by a 0.25 point – it’s now 0.25-0.50 percent. Major banks raised their Prime Rate charged on loans by 0.25 point, but deposit rates remain unchanged.

Rising US interest rates will support the US Dollar – a negative influence on export sales. Add to this the expectation of Argentina devaluing its currency soon and China’s current actions to weaken its currency. Energy futures fell sharply.

Given the above factors and the spec funds’ preference to be short the CBOT, grain and oilseed futures closed strongly lower. Soybean Meal futures fell to new contract lows and the January SM contract has lost over $45.00/ton in the last 2 months. Brazil’s variable moisture conditions and ideas 2016 production may be less than the last estimate aren’t getting enough traction to stop the price slide. January Soybeans are only 18 cents above its contract low. Ethanol futures fell 3.5% as ethanol stocks grew and gasoline demand declined the past week. March Corn is only a nickel above its contract low.

Cattle futures closed slightly lower at 1 pm but dropped more by late afternoon as the boxed beef market weakened sharply. Choice beef dropped .31 to 196.90 and Select fell 1.90 to 184.91. This is much worse than midday quotes of 198.50 and 187.19.

Lean Hog futures closed lower for the third straight day. The February LH contract had the biggest losses; it closed on the month-long uptrend but then traded below it during the afternoon as pork values dropped further. FOB Plant Pork closed down 1.98 at 73.26 with large value losses in loin, picnic and ham cuts. FOB Plant was only down 1.34 at noon.

Corn Mar -7 370 (369-78); Jly -7 380; Dec -6 391 Bean Jan -5 862 (856-871); Jly -5 875; Nov -5 879 Meal -2 270 Oil -33 3037 Wheat Mar -11 483; Jly -9 495 (495-507) KC -11 481; MGE -7 506 Oats -5 223 Rice +5 1095

LC Dec -32 11997; Apr -25 12605; Aug +10 11497 FC Jan -82 14770; Apr -62 14687; Aug -65 14882 LH Feb -102 5790; Apr -45 6372; Jun +15 7630 Milk Dec -5 1453; Jan -7 1360

 

US$ +.2% Dow +224 17749 SP +30 2073 NAS +76 5071 Tran +136 7687 VIX -3.15 17.80 -15%

WTI -161 3574 Brent -126 3719 Gas unch 125 NG unch 182 HO -3 112 Eth -5 139 Gold +11 1074 Slvr +37 1411

2-yr +.041 1.009% 5-yr +.057 1.751% 10yr +.032 2.298% 30yr +.014 3.005%