Crop markets generally weak on Tuesday

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Tuesday morning news of a surprisingly weak economic report out of China undercut cotton futures in early trading. Prices slipped even farther later in the morning, which probably reflected the combination of U.S. dollar strength and news that Goldman Sachs had suggested investors lighten their commodity market holdings. It was rather surprising that concurrent equity strength seemingly did little to boost the white fiber market (since apparel demand is closely related to economic growth). May cotton dove 0.94 cents to 83.39 cents/pound late Tuesday morning, while December slid 0.13 cents to 86.06.

Talk of extremely tight spot markets across the Midwest apparently supported nearby soybean and meal futures Tuesday, whereas deferred contracts and oil were under significant pressure. Negative developments in outside markets, along with concerns about future Chinese demand seemed to be undercutting the prices. Ideas that improved moisture conditions will boost the 2013 bean crop probably played a role in the decline. May soybeans edged 2.5 cents higher to $14.1975/bushel Tuesday afternoon, while May soyoil sank 0.05 cents to 48.57 cents/pound, and May soybean meal gained $1.7 to $411.7/ton.

Wheat futures apparently suffered from the same bearish influences depressing corn Tuesday. Traders also seem to believe the moisture provided by recent rains will improve spring wheat crops more than frosts have hurt winter wheat prospects. Still, the significant increases in the poor to very poor conditions on the Monday afternoon reports seem likely to support the Kansas City market. May CBOT wheat futures tumbled 4.75 cents to $6.975/bushel at its Tuesday settlement, while May KCBT wheat slipped 2.25 cents to $7.3725 and May MGE futures lost 3.5 cents to $8.1525.

Cattle traders seemed to be encouraged by the large equity gains posted Tuesday morning, but the reasons for the modest advance may have come from closer to home. That is, forecasts for warming weather next week suggest consumer beef demand will finally surge with the belated start to the spring grilling season. The wholesale gains posted Monday and again at midday Tuesday also seemed persuasive. June cattle closed unchanged at 120.82 cents/pound Tuesday afternoon, while December gained 0.10 cents to 126.25. The prospect of cheaper feed boosted the yearling market. May feeder cattle futures jumped 1.00 cent to 139.60 cents/pound, while August spiked 2.15 cents to 148.12.

The prospect of warmer weather and surging consumer demand during the spring grilling season apparently boosted CME lean hog futures Tuesday. The underlying optimism was probably exaggerated by the cash and wholesale gains posted Monday afternoon, especially with the industry looking for much more of the same during the days and weeks just ahead. Modest pork gains at news very likely proved supportive as well. May hog futures climbed 0.25 cents to 87.82 cents/pound at Tuesday trading wound down, while the June contract advanced 0.40 cents to 90.02.

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