The crop markets are rebounding from Friday’s weak action. The U.S. dollar surged to its highest levels since early 2006 last Friday and continued rising Sunday night, thereby raising the cost of American goods to international buyers. That strength probably played a sizeable role in last Friday’s crop market decline, but wire services tended to blame technical factors. Actually, corn futures apparently ended last week just above their 40-day moving average, so the weekend bounce wasn’t terribly surprising. March corn futures climbed 7.25 cents to $4.03/bushel early Monday morning, while July rose 7.25 to $4.185.
The soy complex is also coming back from last week’s losses. Last Friday’s crop market losses were widespread, with the soybean and product markets joining the general decline. However, they also rebounded over the weekend despite the persistent U.S. dollar strength. Optimism about the global economic outlook and protein demand may be spurring buying, but the prospect of large South American crops could limit gains. March soybean futures surged 11.25 cents to $10.1875/bushel Sunday night, while March soyoil inched up 0.01 to 32.10 cents/pound, and March meal gained $5.5 to $345.9/ton.
Frigid weather may be supporting the wheat markets. Recent snowfall over the Great Plains has not been particularly heavy, which may have rendered portions of the winter wheat crop vulnerable to winter kill amidst currently frigid conditions. Indeed, cold is expected to reign all week. Thus, wheat futures are rallying despite the U.S. dollar surge. March CBOT wheat jumped 10.5 cents to $5.9175/bushel in early Monday trading, while March KC wheat advanced 9.25 cents to $6.2625/bushel, and March MWE wheat rallied 9.0 to $6.20.
Cash strength seemed to boost cattle futures last Friday. Cash prices apparently matched bullish expectations around $166/cwt (cents/pound) last Wednesday, but futures reacted poorly. However, the Chicago market turned sharply higher Friday as news of cash prices as high as $169 was passed along. Mixed beef quotes may have limited the advance and might weigh upon CME futures upon today’s opening. February live cattle leapt 2.12 cents to 165.67 cents/pound at last Friday’s close, while April futures soared 2.17 cents to 164.57. January feeder cattle futures rocketed up the 4.50-cent daily limit to 223.95 cents/pound and March feeders spiked 4.12 cents to 221.45.
Hog futures rallied despite spot market weakness. The cash hog markets slipped last Friday, while pork cutout values ended the week rather poorly. Anticipation of that weakness probably caused early Friday weakness, but bullish seasonal ideas very likely caused the subsequent bounce. That is, traders very likely think resurgent cattle and beef prices will exaggerate substitution demand for hogs and pork. Still, bulls may not stick with positions if the optimism isn’t confirmed soon. February hog futures closed 0.10 cents higher at 81.30 cents/pound last Friday, while June hogs gained 0.45 cents to 92.00.
Cotton is moving in concert with grain and soy futures. Last Friday’s weekly Export Sales results probably disappointed the cotton industry, but the U.S. dollar surge probably weighed on prices as well. Nevertheless, the fiber market is rallying in concert with the Chicago crop markets to start the week. Again, that seemingly reflects fresh optimism about the global economic outlook for 2015. March cotton futures lifted 0.69 cents to 60.27 cents/pound shortly after sunrise Monday, while the July contract moved up 0.37 to 61.60.