Bearish Chinese economic news sank the financial markets Monday

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The futures markets moved almost universally lower Monday in response to a disappointing GDP report out of China Sunday evening. The financial markets clearly led commodities lower. Corn prices certainly were not immune to the damage, with concerns about forthcoming demand apparently undercutting prices. The weekly Export Inspections report may have limited the damage somewhat. May corn fell 12.0 cents to $6.4675/bushel late Monday afternoon, while December plunged 18.5 cents to $5.3225.

After holding up rather well in the morning, soybean futures also broke down in reaction to the financial market weakness dominating trading Monday. Talk of tight spot markets across the Midwest reportedly offered support early in the day. However, the monthly NOPA Crush report released apparently rendered the market vulnerable to the broader sell-off May soybeans sank 16.5 cents to $13.95/bushel at the Monday close, while May soyoil fell 1.08 cents to 48.18 cents/pound, and May meal slid $6.7 to $393.3/ton.

Despite talk of recent frost damage to the U.S. winter wheat crop and forecasts for another bout of freezing temperatures later this week, wheat futures suffered surprisingly large losses Monday. Ideas that spring wheat plantings will be delayed remain very much in play, but such concerns apparently did little to limit the bearish spillover from the financial markets. Traders are apparently worried about the potential impact of slower Chinese growth upon its recent wheat buying binge. May CBOT wheat futures plummeted 20.75 cents to $6.9375/bushel at its Monday settlement, while May KCBT wheat dove 20.5 cents to $7.325, and May MGE futures tumbled 9.75 cents to $7.98.

Cattle traders were probably hoping for improved cattle and beef quotes early this week, since those markets historically perform rather well during mid-April. However, cattle and feeder futures could not avoid the broad selling dominating the financial markets Monday. The losses seem overdone, but bulls will probably need to see some favorable news before they will be willing to return as active buyers. June cattle closed 0.93 cents lower, at 119.82 cents/pound Monday, while December lost 1.27 cents to 125.45. May feeder cattle futures plunged 1.12 cents to 139.80 cents/pound, and August crashed 1.42 cents to 146.37.

Hog futures suffered major losses Monday as well. The implication that slowing global growth will undercut consumer buying evidently overruled ideas that hog and pork demand will prove very strong on a seasonal basis this spring. That might easily change if/when traders see signs of aggressive buying at the cash and/or wholesale levels, but that was not the case at the start of activity this week. The lightly traded May hog contract tumbled 1.10 cents to 86.27 cents/pound as market activity wound down Monday, while the June contract broke down 1.30 cents to 88.60.



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