After posting an impressive late-week performance last week, corn futures turned lower at the start of this week’s trading. That may have resulted from weekend rains over Brazil and Argentina, and to forecasts for more Argentine rain over the next two weeks. The drop was still rather surprising, since a Taiwan firm issued a tender for 130,000 tonnes overnight. Traders may also have been squaring positions ahead of tomorrow’s set of important USDA reports. March corn futures slid 2.75 cents to $3.5425 Sunday night, while May declined 2.75 to $3.60.

Soybean futures also declined as this week’s trading commenced, seemingly in response to good Brazilian rainfalls over the weekend. The implied improvement in South American production potential apparently outweighed optimism based upon a private firm’s 2-million tonne boost to its 2015/16 estimate of China’s soybean import forecast. As in the other crop markets, traders are probably adjusting their positions prior to tomorrow’s big USDA reports. March soybean futures slipped 1.5 cents to $8.7475 in Monday’s predawn action, while Mar soyoil slumped 0.05 cents to 29.59 cents per pound and March meal sagged $1.10 to $267.60.

Weather in the Black Sea region may have affected the start of this week’s wheat futures trading, with bitter cold toward the northeast reportedly endangering wheat in that area, whereas big snows toward the south and west provided cover for winter wheat. It was rather surprising that Sunday night financial market action didn’t seem to provide support. That is, after falling sharply late last week, stock index indexes seemed vulnerable to a major downward follow-through, but began the week quite firmly. Meanwhile, declining U.S. dollar quotes might have been seen as a bullish development. As in the other crop markets, Tuesday’s big USDA reports are looming large. March CBOT inched 0.25 cent lower to $4.785 per bushel early Monday morning, while Mar KC wheat dropped 2.25cents to $4.705, and March MWE lost 1.25 cents to $4.9975.              

Thursday’s futures breakdown ideas that wholesale beef prices will soon peak pressured cash prices Friday. Funds are selling the nearby contract and buying deferred months betting on nearby weakness. Still, the recent 11% surge in cutout values was causing producers to ask as much as $1.40/pound on a live basis. Large supplies and higher asks by producers has kept the cash market quiet. The latest packer margin index was at +$75.15 per head Friday compared to +$51.05 per head on Thursday. For the week the margin was over all positive at + $20.15 per head. February live cattle fell 0.65 cents to 132.875 cents/pound Friday, while April futures dropped 0.48 cents to 133.525. March feeder cattle declined 3.63 cents to 157.325 cents/pound Friday, and April feeders fell 3.45 cents to  157.375.              

Commercial buying support held firm last week, thereby keeping hog futures from suffering limit losses similar to those in the cattle complex. Some traders may have been hearing reports that last week’s slaughter total would top the comparable year-ago levels by over 10%, which is certainly greater than the 3%-5% increase implied by the December USDA Hogs & Pigs report. However, they were probably forgetting that early-January 2015 kills were truncated by a Midwest snow storm, which made conclusions on hog supplies rather moot. Ultimately, the sustained cattle weakness, as well as the big breakdown suffered by the equity markets, seemed to exert considerable bearish influence over hog futures. The fact that the February contract closed below the 60-cent level was not a favorable development. Still, the cash strength indicated by late-day reports, as well as the Sunday night stock rebound, appear supportive of today’s opening. February hog futures closed 0.30 cents/pound higher at 59.850 cents/pound Friday, while April hogs dropped 0.38 cents to 65.225 cents/pound.

As one would expect, last Friday’s big stock market losses and the prospect of an economic slowdown implied by the breakdown weighed on cotton futures again last Friday. Thus, it would have been easy to expect a firm opening to this week’s trading, since stock index futures posted a significant Sunday night rebound. However, that was not the case, with the ICE market suffering another set of modest losses. One could certainly argue that the recent futures drop has developed momentum of its own, since the March contract has fallen to its lowest level since early October. Traders may think it’s destined to retest the pivotal 60-cent level. As in the other crop markets, they’re almost surely squaring positions ahead of tomorrow’s important USDA reports as well. March cotton stumbled 0.08 cents lower to 61.32 cents/pound in early Monday trading, while May cotton fell 0.16 to 61.90 cents/pound.