The crop markets moved generally higher Sunday night. The U.S. dollar set back from it late-week highs over the weekend, while the equity markets remained under downward pressure. Those competing influences may have encouraged crop market buying, especially with El Nino’ now dominating the central Pacific. Traders seem to be becoming somewhat concerned about corn and soybean prospects due to the shifting of weather conditions. July corn rose 2.25 cents to $3.6275/bushel early Monday morning and December slid 2.0 cents to $3.80.
Talk of Chinese demand may have encouraged buyers of soybeans and meal. Excessive rainfall over the central U.S. is delaying late soybean plantings, thereby raising questions about planted acreage and fall yields. Moreover, an early-Monday report indicated strong Chinese soy imports during May, although the bulk of that product came from South America. Soybean oil followed the crude and palm oil markets lower. July soybean futures climbed 6.0 cents to $9.4375/bushel Sunday night, while July soyoil slumped 0.28 cents to 34.50 cents/pound, and July meal bounced $3.1 to $308.0/ton.
Wheat rallied as this week’s action got underway. Although the global market remains very well supplied, concerns about the new-crop outlook are apparently supporting the golden grain markets at this juncture. Not only does the recent emergence of El Nino’ conditions in the central Pacific suggest forthcoming drought in Australia and Southeast Asia, recent rainfall has opened the door for disease in the U.S. winter wheat crop. July CBOT wheat futures climbed 7.0 cents to $5.24/bushel shortly after sunrise Monday, while July KC wheat gained 6.5 cents to $5.4175/bushel, and July MWE moved up 4.5 to $5.76.
Live cattle futures traded higher in early Friday action, but settled lower despite news of firmness in the cash market. The reversal probably reflected bearish seasonal expectations, since cattle prices traditionally declined significantly during early summer. The late drop suggests a weak opening today, although the results of Friday evening trading will clearly affect CME prices. August cattle futures sagged 0.50 cents to 150.57 cents/pound at the close Friday, while December futures declined 0.20 cents to 153.75. Meanwhile, August feeder cattle futures dropped 0.40 cents to 221.90 cents/pound, and November feeders lost 0.07 to 217.75.
Hog futures rebounded from recent losses Friday. Anticipation of the traditional early-summer rally may have boosted CME futures, especially since the various contracts are now trading at discounts to the CME index. A mixed-to-firm opening seems likely today, since cash markets stabilized despite pork weakness Friday afternoon. August hog futures surged 1.27 cents to 80.82 cents/pound at the close Friday, while December added 0.65 to 67.20.
Technical factors seem to be affecting cotton moves. Cotton futures have traded within a wide range in recent weeks, but have recently been confined by moving average support and resistance. Divergent influences such as the weekend slippage in both the U.S. Dollar and stock index futures have apparently left the door open to technically inspired traders. For example, July futures rebounded from their 10-day moving average overnight and were testing resistance associated with their 20-day MA in early Monday trading. July cotton futures advanced 0.59 cents to 64.60 cents/pound in early Monday trading, and December ran up 0.26 to 64.81.