Thursday was marked by major equity market losses around the globe after Chinese stock markets closed at ‘limit-down’ levels after just 30 minutes of trading. However, the commodity markets showed some encouraging signs, with crude oil bouncing from fresh lows and soybeans and wheat leading the crop markets higher. Those may have reflected yesterday’s surprising U.S. dollar weakness. Corn joined the general financial market rebound in early Friday trading, although fundamentals remain less thansupportive. Look for position squaring ahead of next Tuesday’s big USDA reports to exert increasing influence over trading. March corn futures rose 1.75 cents to $3.5475 in pre-dawn Friday action, while May moved up 1.75 to $3.6025.
Thursday morning news that the previous week’s export sales had topped the comparable year-ago level apparently sparked renewed optimism in soybean futures. The rise was especially impressive when viewed against the backdrop of diving stock market indexes around the globe. Against, concurrent US dollar weakness probably spurred some buying. Thus, it wasn’t terribly surprising to see beans rallying in concert with stocks Thursday night. As with the other crop markets, the looming USDA reports could affect trading today and early next week. March soybean futures rallied 4.25 cents to $8.6875 early Friday morning, while Mar soyoil gained 0.17 cents to 29.79 cents per pound and March meal climbed $2.30 to $269.70.
Despite a poor result on the weekly Export Sales report and the bearish financial market environment, wheat futures posted solid gains Thursday. They continued rising in overnight action, with rebounding equities and renewed hopes for global commodity demand likely encouraging buying. But talk of reduced plantings and fears for Black Sea what without snow cover amidst arctic cold are apparently supporting wheat markets. March CBOT advanced 3.5 cents to $4.72 per bushel as Friday dawned, while Mar KC wheat added 3.25 cents to $4.665, and March MWE edged up 1.0 cent to $4.9575.
US Cattle futures were limit down on Thursday, with sharp declines in the feeder cattle market spilling into live cattle. Weakness in outside markets drove the complex lower despite continued wholesale strength. Beef cutouts have recently surged 11%, thereby raising hopes that demand is picking back up. Choice cuts jumped another 2.63 to 230.66 cents/pound, while Select cuts surged 2.57 to 223.25. Monday-Thursday slaughter is estimated at 425,000 head vs 396,000 last week and 430,000 last year. February live cattle fell limit down of 3.00 cents to 133.525 cents/pound Thursday, while April futures were also limit down of 3.00 cents to 134.30. March feeder cattle declined 4.50 cents to 160.95 cents/pound Thursday, and April feeders fell 4.50 cents to 160.825.
Lean hogs were mixed as short covering and technical selling pushed futures lower Thursday, with limit-down cattle losses exaggerating the drop. Wednesday, government data shows hog weights increased by 3.2 lbs from last week to 286.3 lbs for Iowa/Minnesota. A holiday surge is normal, but the sheer size of the increase pressured an already weaker market. Although cash and wholesale prices moved higher, the premiums already built into futures robbed the market of buying power. The trade still anticipates a reduction in the number of market-ready hogs coming to market. Slaughter so far this week is estimated at 1,746,000 head vs 1,658,000 last week and 1,651,000 last year. Country hogs surged 1.20 higher to $50.39. February futures closed 1.27 cents/pound lower at 59.550 cents/pound Thursday, while April hogs dropped 0.63 cents to 65.600 cents/pound.
Cotton futures again declined in concert with the equity markets Thursday, since pessimism about the global economy often focuses upon its impact upon apparel demand. The concurrent US dollar decline apparently did little to support the fiber market. Conversely, the Thursday night rebound by stock index futures very likely spilled over into the cotton market, with the gains posted by the grain and soy markets probably encouraging cotton bulls as well. As in the other crop markets, next Tuesday’s USDA report are looming large for those in the cotton industry. March cotton inched up 0.03 cents to 61.46 cents/pound early Friday, while May cotton rose 0.02 to 62.14 cents/pound.