Chinese may have weighed on grain prices Monday night. The weekly USDA Crop Progress report indicated corn conditions had remained unchanged at 74% good to excellent, which is quite high by historical standards. That was hardly surprising, so traders may have paid more attention to reports out of China, which stated their domestic corn stocks at record highs, and highlighted debates on that country’s domestic prices. Futures seemed to dip slightly in response. July corn slid 1.25 cents to $3.64/bushel shortly after sunrise Tuesday and December skidded 1.5 cents to $3.82.
Talk of Chinese demand may have encouraged buyers of soybeans and meal. Excessive rainfall over the central U.S. is delaying late soybean plantings, thereby raising questions about planted acreage and fall yields. Positive crush margins in the U.S. and South America are providing support as global meal demand is reportedly causing some Midwest processors to scramble for soybeans. Soybean oil followed the crude and palm oil markets lower, despite the U.S. dollar breakdown. July soybean futures ended Monday having climbed 6.5 cents to $9.4425/bushel, while July soyoil tumbled 0.68 cents to 34.10 cents/pound, and July meal bounced $4.6 to $309.5/ton.
Wheat built upon last week’s rally. Although the global wheat market remains very well supplied, concerns about the new-crop outlook apparently supported golden grain prices again Monday. Not only does the recent emergence of El Nino conditions in the central Pacific suggest forthcoming drought in Australia and Southeast Asia, recent rainfall has opened the door for disease in the U.S. winter wheat crop. Today’s dollar dive also encouraged bulls. July CBOT wheat futures climbed 11.0 cents to $5.28/bushel at late Monday trading, while July KC wheat gained 9.25 cents to $5.445/bushel, and July MWE ran up 9.0 to $5.805.
Live cattle futures exhibited surprising Monday strength. Cattle futures tumbled on bearish cash expectations last Friday, with Nebraska animals changing hands $4 lower at $155/cwt (cents/pound). However, ideas that the cash drop was somewhat overdone, as well as the fact that nearby futures were still trading at discounts probably encouraged bulls. They may also be expecting increased wholesale demand during mid-June as grocers buy beef for planned Independence Day features. August cattle futures jumped 1.02 cents to 151.60 cents/pound late in Monday’s CME session, while December futures leapt 1.32 cents to 155.07. Meanwhile, August feeder cattle futures surged 0.95 cents to 222.85 cents/pound, and November feeders rose 0.65 to 218.40.
Hog futures ended Monday on a mixed note. Pork prices have remained relatively depressed lately as the industry struggles to get past last year’s PED outbreak, price spike and subsequent supply resurgence. Retail prices are still quite high, thereby seeming to strangle demand throughout the production/marketing chain. However, prices traditionally surge during early summer, so discounted summer futures look underpriced to many. August hog futures slid 0.17 cents to 80.65 cents/pound as CME pit trading halted, while December edged up 0.07 to 67.27.
Cotton futures posted sizeable Monday gains. Cotton prices have traded within a wide range in recent weeks, but have recently been confined by moving average support and resistance. Divergent influences such as the weekend slippage in both the U.S. dollar and stock index futures apparently left the door open to technically inspired traders. For example, July futures rebounded from their 10-day moving average overnight and ended the day just under resistance associated with their 40-day MA. July cotton futures advanced 0.79 cents to 64.80 cents/pound as Monday’s ICE session ended, while December ran up 0.79 to 65.34.