Corn futures moved higher early Monday morning, undeterred by headlines that oil price fell to their lowest since 2004 with Brent and WTI down 35% so far in 2015. For November, China imported 464,949 tonnes of DDG’s, 30% less than October and up 140% from a year ago. The month-over month decrease was due to weak domestic demand and large stocks. China’s ethanol imports reached 135,865 tonnes, a record for November, up from just 26 tonnes a year ago. The figure was nearly double their October imports of 68,961 tonnes, a boon to producers who recently exceeded the 1 million barrel per day production benchmark despite thin margins. The Dow lost 367 points Friday. The dollar and gold were both higher. March corn futures were 0.75 cents higher at $3.7525 early Monday morning, while May gained 1 cent at $3.815.
Weather in Brazil, the largest soybean exporter, helped soybean futures higher to start the week after the oilseed gained over 21 cents last week on concerns over the yield impact from dryness. Weekend stated that soil assessment suggested pockets of notable drying, particularly in northeastern Brazil, due to erratic and unevenly distributed rainfall. Argentina farmers slowly start selling their soybeans after the tax reduction and the 26% devaluation of the peso. Analysts suggest 8 to 10 million tonnes of Argentine beans may be sold within the next three months. The strength of Chinese soybean demand during the first quarter will be another key factor in sustaining a rally above $9. Palm oil futures hit 3-mo highs on a weaker ringgit and drier weather. The January contract moved 0.75 cents higher to $8.9325 early Monday, while Jan soyoil gained 24 points to 30.76 cents per pound and January meal gained $0.60 to $281.60.
Wheat futures were fractionally higher Monday morning after ending last week 0.7% lower. Chicago wheat recovered above the 4.86 support level Friday after tailwinds from Brazilian weather concerns. Russia’s ag ministry has proposed to lower or cancel its wheat export tax after the recent ruble weakening, falling 6% against the USD in December, triggered tax growth. Futures still face pressure from prospects of a stronger dollar against falling foreign currencies while weather problems in the Baltic Sea region as well as lower production in India could generate rallies moving forward. India produces 10% of the world wheat and is set to see its second consecutive annual drop in production due to excessive moisture in February and March. March CBOT wheat futures gained 0.75 cents to $4.875 per bushel Monday, while Mar KC wheat was 0.5 cents higher to $4.8275, and March MWE climbed 1.75 cents to $5.08.
Live cattle and feeder cattle both closed limit-up (3 cents) Friday and closed 0.9% higher last week on pre-report buying. The Cattle on Feed report was positive on all categories. Placements were at a record low for the data which started in 1996, while Cattle on Feed was below last year at 99.8%. The trade expected 101%, pointing a higher live cattle open. Poultry and pork remain competitive retail alternatives, putting pressure on beef demand with an uptick not expected until early February. Cattle slaughter for the week, including Sat, was estimated at 590,000 head, compared to 581,000 head last week and 438,000 a year ago. February live cattle gained 3 cents to 125.52 cents/pound Friday, while April futures climbed 3 cents to 127.17. January feeder cattle advanced 4.5 cents to 148.75 cents/pound Friday, and March feeders lifted 4.5 cents to 147.95.
Lean hog futures rallied 1.4% Friday on pre-holiday bargain hunting after tumbling 4% Thursday on the belief that increasing supply may send wholesale pork prices yet lower. Funds may have also been positioning ahead of Tuesday’s cold storage report and Wednesday’s Hogs and Pigs report. Country hogs continued .47 lower to 48.66 while the lean hog cash index fell .31 to 55.57, at a discount to futures. Hog slaughter for the week, including Sat, was estimated at 2.493 million head, vs 2.426 million last week and 2.314 million a year ago. The next two weeks will be short production weeks and could signal higher production numbers the first week of year. Look for a bottom to form post-holiday, as low prices help reverse demand. February futures settled 0.82 cents/pound higher at 56.62 cents/pound Friday, while April hogs gained 0.47 to 62.05.
Cotton futures closed higher Friday, presumably on the dollar falling 0.5%. March cotton has traded above the 62.94 support mid-October, while the resistance level of 63.84 hasn’t been settled above since Aug 21. Global cotton stocks are extraordinarily high at 104 million bales (480 lb.), or nearly 50 billion pounds of cotton. That’s enough to make 127 billion t-shirts, or 17 for every person on earth, according to estimates from the National Cotton Council. Global stocks currently represent about 94% of world consumption, more than double the prevalent ratio during 1980-2010. This is due to China’s stockpiling, which accounts for nearly 60% of world stocks. Mar cotton moved .81 higher to 63.69 cents/pound, while May cotton gained 0.78 to 64.57 cents/pound.