Crop futures declined despite supportive news Monday night

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Active selling hit the crop markets Monday night. Monday’s USDA Crop Progress report stated corn plantings well behind normal and 4% behind industry expectations, which looked bullish for CBOT futures. Big U.S. dollar losses also seemed supportive. Having yellow grain prices decline overnight suggests other considerations caused traders and investors to shift their holdings. July corn dipped 3.75 cents to $5.0425/bushel early Tuesday morning, while December slumped 3.25 cents to $4.9675.

Talk of increased supply is undercutting the soy complex. U.S. soybean plantings are still running well behind normal, but Monday’s news apparently did little to support CBOT prices last night. Traders are reportedly selling in response to talk of increased South American bean harvests and to increased availability of canola supplies in Canada. Early trading could be pivotal, since the overnight drop left July beans resting on major support. July soybeans fell 14.0 cents to $14.4925/bushel Monday night, whereas July soyoil bounced 0.06 cents to 41.23 cents/pound, and July soymeal sank $5.4 to $473.3/ton.

Wheat futures also fell in the face of supportive news. The weekly Crop Progress showed slow spring wheat plantings last week and poor winter wheat conditions over the weekend. The Black Sea situation hasn’t improved either. The fact that bulls couldn’t sustain Monday’s big gains also suggests traders were taking profits on longs and/or shorting the market. July CBOT wheat futures slid 3.25 cents to $7.2575/bushel in early Tuesday trading, while July KCBT wheat futures inched up 0.25 cent to $8.3225, and July MWE futures stalled at $7.8925.

Prospects for an early-May bounce may be supporting cattle futures. Although the cattle market traditionally declines through the second quarter, grocers also tend to buy beef aggressively during the first half of May as they gear up for Memorial Day features. Monday’s modest rise in choice cutout values may have encouraged such ideas. June cattle rallied 0.30 cents to 137.82 cents/pound as Tuesday dawned over Chicago, while December gained 0.25 cents at 144.17. Meanwhile, August feeder cattle advanced 0.37 cents to 190.17 cents/pound, and October ran up 0.32 cents to 191.00.

Evidence of price firmness probably boosted hogs Monday night. After having fallen sharply since peaking in early April, cash hog and wholesale pork values have seemed to stabilize lately. Those posted a general advance Monday, thereby suggesting the normal pre-Memorial Day rally is getting underway. June hog futures surged 0.77 cents to 123.12 cents/pound in early Tuesday action, but December sagged 0.35 to 94.65.

Demand concerns may be weighing on cotton futures. As with the other crops, Monday’s weekly USDA Crop Progress report indicated cotton plantings running well behind normal. That news, along with overnight U.S. dollar losses looked supportive of ICE futures, but those declined in concert with the soy and grain complexes. Pragmatic considerations are probably spurring some of that selling, but doubts about future Chinese demand have also grown lately. July cotton tumbled 0.26 cents to 94.49 cents/pound soon after sunrise (EDT) Tuesday, while December cotton lost 0.16 to 84.37.


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