Renewed optimism about the global economy seemed to boost commodities Sunday night. Asian financial trading was weak during their Monday morning session, but renewed optimism about the global economic outlook seemed emerge overnight. Stock index futures and energy seemed to lead the ag markets higher as well. Corn bounced despite talk of improved moisture in South American fields. March corn rallied 2.75 cents to $3.7275/bushel early Monday morning, while July rose 2.5 to $3.885.
The soy complex is starting the week in confused fashion. Talk of improved South American weather seemed to drag the soy complex lower in late Sunday trading, but futures turned decidedly mixed overnight. Talk of a big Pakistani purchase of U.S. soyoil seemingly boosted that market last Friday, but it was announced this morning that Pakistan is actually buying soybeans. And yet, the oil market built on its Friday bounce, while beans rose modestly and meal turned mixed. Again, renewed hopes for the global economy may have “flipped the switch.” March soybean futures bounced 4.0 cents to $9.65/bushel in predawn Monday trading, while March soyoil surged 0.54 cents to 30.54 cents/pound, whereas March meal was unchanged at $329.9/ton.
Wheat futures are narrowly mixed. Talk of rain over the U.S. southern Plains and a fresh snow blanket for northern areas might easily have depressed winter wheat futures this weekend. One might also think that recent talk of a global glut and price weakness will discourage spring wheat plantings, but the Minneapolis market has declined. The tense Black Sea situation may be adding support. March CBOT wheat gained 1.0 cent to $5.0375/bushel Sunday night, while March KC wheat edged up 0.75 to $5.41/bushel, and March MWE wheat stalled at $5.5675.
Cattle futures rallied in the face of widespread weakness last Friday. Despite the breakdown suffered by the equity and crop markets Friday, live cattle futures posted substantial gains as the day passed. The fact that country cattle prices edged upward from $159.00 to $160.00/cwt probably accounted for the strength, since it suggested a short-term low had formed. However, the January Cattle inventory report seemed surprisingly bearish, so we expect a poor opening this morning. February live cattle futures advanced 1.32 cents to 154.85 cents/pound in late Friday action, while April cattle surged 1.77 cents to 152.27 cents/pound. March feeder cattle futures leapt 1.62 cents to 205.20, and May feeders vaulted 1.42 cents to 206.12.
Mixed spot news caused similar CME hog action Friday. Major pork losses exerted considerable pressure upon nearby hog futures last week. The cash markets firmed Thursday, thereby offering early-Friday support. However, midday quotes broke the pattern, with cash prices dropping and pork quotes rebounding. Those seemingly explain the mixed action at the CME as well. Cash markets ended the week badly, which suggests early weakness today. February hog futures dropped 1.07 cents to 67.47 cents/pound as Friday’s pit session ended, while June hogs climbed 0.47 cents to 84.10.
Cotton futures started the week rather poorly. Little news concerning the cotton outlook emerged over the weekend, so a rebound in concert with equity index futures and the energy markets might have been expected. Talk of a big jump in speculative short positions in ICE futures also seemed supportive. Nevertheless, fiber prices slipped. The fact that the various contracts face major technical resistance at slightly higher levels is probably discouraging bulls. March cotton futures slid 0.06 cents to 59.30 cents/pound shortly after sunrise Monday, while the July contract skidded 0.02 to 60.83.