Renewed soybean strength seemed to boost grain futures Monday night. Monday’s general crop market decline seemed to leave corn and wheat futures vulnerable to further short-term selling, but soybeans ended just above chart support. Thus, last night’s soy bounce appeared to lend support to the grain markets despite having the U.S. dollar bumping up against fresh 11-year highs. May corn futures rallied 2.0 cents to $3.90/bushel early Tuesday morning, while December rose 2.25 to $4.155.
Technical support apparently sparked renewed buying in the soy complex. Bullish soy traders may have been encouraged news that Brazil’s weekend crackdown on the recent trucker strike didn’t clear all roads. Moreover, nearby soybean futures firmed at their 10-day moving average, with both 20 and 40-day MAs also providing back up support. Fresh crude and palm oil strength also backed the soyoil market. May soybean futures gained 1.25 cents to $10.15/bushel Monday night, while May soyoil moved up 0.11 cents to 32.94 cents/pound, and May meal edged $0.4 higher to $333.9/ton.
Wheat also rallied despite weak demand prospects. Wire service sources cited the ongoing U.S. dollar advance, as well as the comparatively high cost of wheat to highlight prospects for poor export demand last night. Nevertheless, futures inched upward in early morning action. Talk of winter freeze damage may have offered support, but the rise looks like a simple response to bullish leadership provided by soybeans. May CBOT wheat bounced 2.0 cents to $5.02/bushel as Tuesday dawned over Chicago, while May KC wheat inched up 1.5 cents to $5.2725/bushel, and May MWE wheat added 1.75 to $5.57.
Cash strength apparently powered Monday’s strong CME cattle gains. Beef prices surged last week, which suggested a looming cash advance. That was the case Friday afternoon, with late-week prices largely matching those from the week prior. That news, along with possible seasonal optimism, seemed to spur Monday’s big surge. The fact that April futures closed above their 40-day moving average, as well as choice beef gains, suggest continued this morning. April cattle futures leapt 1.75 cents to 153.45 cents/pound at Monday’s CME close, while August cattle jumped 1.62 cents to 143.67 cents/pound. Meanwhile, April feeder cattle futures soared 1.80 cents to 202.12 cents/pound, and August feeders vaulted 1.52 to 202.70.
Hog traders seemed cautiously optimistic. The cash hog markets rallied strongly last week, whereas pork cutouts only bounced on Friday after big early-week losses. One suspects the surprising pork weakness made traders cautious about banking on persistently large cash market gains as the spring grilling season looms. Cash and wholesale prices slipped Monday, thereby implying a weak opening today. April hog futures closed up 0.20 cents to 67.67 cents/pound Monday, while June hogs rose 0.17 to 83.05.
Cotton traders may have taken Monday’s Australia news as a bearish signal. Australia’s USDA counterpart ABARE predicted Monday that its 2015/16 cotton crop would top its 2014/15 result by 19% in reaching 559,500 tonnes. One has to wonder if that report, along with recent price gains (as well as the winding down of the short squeeze in March futures) are now weighing on the New York market. Current dollar strength isn’t helpful to the bullish cause either. May cotton declined 0.57 cents to 64.28 cents/pound in early Tuesday trading, while December futures sank 0.64 to 65.44.