Weather news seems to be affecting the grain markets. News of a Chinese bank stimulus boosted soy complex hopes for higher prices based upon demand from that country. Meanwhile, wheat futures seemed to rise on news of comparatively small rainfall totals over the northern Plains, since that might cut forthcoming crops. In contrast, short-term dryness might accelerate corn plantings and boost fall production prospects, which might explain overnight corn slippage. May corn futures slid 1.5 cents to $3.7825/bushel early Monday morning, while December lost 2.0 to $4.0125.
The soy complex posted modest weekend gains. China’s central bank lowered the reserve requirements for domestic banks over the weekend in hopes of stimulating their economy. If successful, that might boost the
country’s already huge demand for soybeans and products, which probably explains the modest advance posted by those markets in starting this week’s trading. May soybean futures rose 2.75 cents to $9.715/bushel
Sunday night, while May soyoil inched up 0.04 cents to 31.56 cents/pound, and May meal added $1.1 to $316.1/ton.
Wheat futures proved surprisingly firm Sunday night. The wheat markets ended last week on a decidedly mixed note, which seemingly reflected uncertainty about the weather and crop outlooks, as well as persistently weak demand for U.S. grain. Weekend rains over portions of the central U.S. reportedly fell short of forecasts, which may explain the general strength seen last night. May CBOT wheat gained 1.25 cents to $4.9575/bushel shortly after dawn Monday, while May KC wheat edged 2.25 cents higher to $5.115/bushel, and May MWE wheat rallied 3.25 to $5.36.
Cash losses sparked another breakdown in cattle futures. Friday’s cattle events were quite similar to those seen one week prior, when talk of cash market losses sent Chicago prices tumbling. Weak midsession beef quotes
seemed to trigger the CME drop, which then accelerated upon news of lower cash market declines. The dive implies follow-through losses upon today’s opening. June and August cattle futures plunged the 3.00-cent
daily trading limit, ending Friday at 149.00 and 146.67 cents/pound, respectively. Meanwhile, May and August feeder cattle futures plummeted the expanded 4.50-cent feeder limit to respectively close at 208.52 and
Wholesale strength limited CME hog losses. Bullish seasonal expectations are built into hog futures, so divergences from an upward cash trend, as seemed to be the case Friday morning, tend to weigh on Chicago prices.
However, midsession news of modest pork gains apparently limited the decline, since that encourages packer demand for swine. Afternoon reports indicated a big wholesale surge, which seems likely to support hogs on
their Monday opening. June hog futures slipped settled just 0.10 cents lower at 76.27 cents/pound Friday, while December sank 0.52 to 67.87.
Chinese news also boosted cotton futures. Chinese officials moved to stimulate their economy over the weekend, which financial and commodity traders viewed as supportive of commodity demand. The move probably
explains concurrent gains in stock index futures and the U.S. dollar, with the implied direct and indirect impact upon cotton demand apparently encouraging fiber traders. May cotton advanced 0.14 cents to 63.43
cents/pound in early Monday trading, while December futures lifted 0.05 to 63.69.