Chinese news may have undercut corn futures Monday night. Chinese officials announced overnight that had approved Brazilian corn for import. The implied increase in competition for U.S. corn apparently weighed on CBOT prices. In addition, traders are probably inclined to balance their positions ahead of tomorrow’s WASDE report. May corn slumped 2.0 cents to $4.9725/bushel early Tuesday morning, while December lost 3.0 to $5.025.
Talk of South American imports continues weighing upon the soy complex. News that a ship carrying South American beans had ported in New Orleans depressed soybean and product prices Monday. And while the domestic situation is likely to remain very tight (which will probably be confirmed by Wednesday’s WASDE report), the potential influx of Brazilian beans could undercut old crop prices. May soybeans slipped 0.5 cents to $14.6375/bushel in predawn Tuesday trading, while May soyoil dropped 0.30 cents to 41.13 cents/pound, but May soymeal bounced $1.9 to $476.2/ton.
Winter wheat conditions may be better than expected. The weekly state reports on winter wheat conditions showed continued deterioration in the southern Plains. However, having the markets suffer moderate declines in the wake of that news suggests traders expected crop conditions to be even worse. May CBOT wheat futures fell 3.5 cents to $6.7275/bushel in early Tuesday action, while May KCBT wheat futures slid 3.0 cents to $7.365, and May MWE futures edged 1.25 cents lower to $7.21.
Futures discounts may have spurred overnight cattle buying. Beef prices declined Monday and an industry report indicated this week’s feedlot showlists had grown from last week. Both of those developments seemed negative for cattle futures. However, CME cattle futures rose modestly last night, which may have reflected the sizeable discount to cash values already built into the various contracts. June cattle futures rose 0.12 cents to 135.05 cents/pound around dawn Tuesday, while December skidded 0.05 to 139.60. Meanwhile, May feeder cattle sagged 0.15 cents to 178.70 cents/pound, and August dipped 0.15 to 180.35.
Wholesale losses appeared to spark fresh CME hog sales last night. Discounts built into hog futures probably attracted buying Monday. However, after seeming set to rise on the day, pork cutout ended the day significantly lower. Thus, futures gave back a substantial portion of Monday’s gains in overnight trading. June hog futures dove 1.65 cents to 119.10 cents/pound early Tuesday morning, while December tumbled 0.40 to 90.25.
Cotton futures posted a technical bounce Monday night. Monday’s news that Chinese officials had set a domestic cotton price target well above global values depressed the ICE market. However, bears proved unable to force the nearby May future below robust support around its 40-day moving average. That fact seemed to spark a technical rebound last night despite concurrent equity index weakness. May cotton rallied 0.52 cents to 91.14 cents/pound as Tuesday dawned over New York, and December cotton gained 0.15 to 79.99.