Crop markets start week on a mixed note

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Corn sustained last Friday’s post-report advance. Last Friday’s USDA reports proved bullish for corn, since the USDA cut its estimate of the 2013 U.S. crop and posted stock totals well below forecasts. Prices continued rising Sunday night, with likely support from news that South Korea had bought 137,000 tonnes rejected by China. March corn futures edged up 1.25 cents to $4.34/bushel early Monday morning, while May added 1.0 to $4.4175/bushel.

The soy complex remained weak after failing last Friday. Friday’s USDA reports had mixed-to-supportive implications for the soy outlook. However, soybean futures failed at major chart resistance soon after the data were released and closed only modestly higher on the day. The late slide seemed to continue in early-week trading, particularly with the Asian palm market apparently weighing on the whole complex. March soybeans slid 6.5 cents to $12.72/bushel in early Monday trading, while March soyoil dipped 0.13 cents to 38.10 cents/pound, and March soymeal lost $3.4 to $410.2/ton.

The wheat markets rebounded from Friday’s lows in early Monday action. The wheat markets reacted badly to last Friday’s data indicating the December stocks total and the 2013/14 carryout figure topped expectations. However, pragmatic considerations and news that Egypt is buying 55,000 tonnes of U.S. grain for February delivery seem to supporting prices to start this week. March CBOT wheat futures bounced 5.5 cents to $5.745/bushel in pre-dawn action Monday, while March KCBT wheat futures rose 3.25 cents to $6.2925, and March MWE futures gained 2.5 to $6.23.

Record prices supported cattle futures Friday. After proving surprisingly weak Thursday, the cattle market seemed set to resume its late-2013 rally Friday. Beef cutout values jumped to record highs and were followed to a fresh all-time peak by the cash markets as the work week concluded. This seems to bode well for this week’s trading. February cattle futures advanced 0.15 cents to 136.70 cents/pound at their Friday settlement, and April futures gained 0.10 to 137.35. Meanwhile, March feeder cattle futures reversed downward by 1.17 cents to 167.65 cents/pound, and May sank 1.02 to 168.90.

Hog futures also moved up last Friday. Ideas that the hog market is set for a technical and seasonal rally apparently supported CME hog prices as the week’s trading ended. Thursday’s late wholesale strength and mixed-to-firm cash quotes may have encouraged bulls looking for a surge into mid-February. Record cattle and beef prices probably helped the bullish cause as well. February hogs surged 0.57 cents to 85.82 cents/pound as CME pit trading ended Friday, while June ran up 0.30 to 100.90.

Cotton proved surprisingly firm to start the week. Last Friday’s USDA data was somewhat bearish for the cotton outlook, thereby dragging the ICE market downward. However, it’s rather apparent that bullish traders aren’t ready to throw in the towel just yet, since futures rebounded modestly Sunday night. The rise seems technical in nature, especially in light of news that China’s purchases for its massive reserve hit a two-month low last week. March cotton climbed 0.36 cents to 82.95 cents/pound to start the week, and July cotton added 0.43 cents to 82.90.

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