The grain and oilseed markets began this week as they ended the last, with prices moving almost universally lower. Favorable weather forecasts for the Corn Belt are almost surely playing a big role in the ongoing weakness, but outside factors weren’t helping the bullish cause. The U.S. dollar remains strong and seems in a position to test its spring highs. Meanwhile, ideas that the U.S.-Iran deal will enable the latter to push oil onto the global market are weighing on commodities in general. September corn futures slid 4.75 cents to $4.155/bushel Sunday night, while December sagged 4.75 cents to $4.265.
The soy complex also began the week poorly, with bean and product futures moving unanimously lower. As with corn, forecasts for fine growing weather, with generally warm and dry conditions likely to be interrupted by intermittent showers look helpful for new crop growth. Concurrent dollar strength is likely causing export customers to look to South American, whereas fresh palm oil losses are weighing on soyoil quotes. August soybeans dove 12.5 cents to $10.0275/bushel in early Monday action, while August soyoil dipped 0.16 cents to 31.62 cents/pound and August meal slumped $4.2 to $356.9/ton.
The bearish global wheat situation remains a constant obstacle to bullish wheat moves, with favorable spring wheat conditions in the northern Plains appearing to favor bears as well. Conversely, drier summer conditions are probably spurring the winter wheat harvest. The resurgent U.S. dollar is also hurting the competitiveness of American grain, especially since U.S. wheat is already seen as uncompetitive on the global market. September CBOT wheat futures fell 8.25 cents to $5.4575/bushel shortly after sunrise Monday, while Sep KC wheat dropped 9.5 cents to $5.37/bushel, andSeptember MWE lost 8.75 cents to $5.66.
Live cattle futures showed few sparks to the upside Friday after falling to a 13-month low Thursday as weak demand and protein alternatives continued weighing on prices. While the cattle decline seemed to pause Friday, August futures have fallen well below their 100-day moving average and appear to suffering a technical breakdown that could carry prices even lower. Boxed beef values continued sliding late Friday afternoon, which seemingly bodes well for their Monday opening. August cattle gained 0.32 cents to 146.65 cents/pound Friday, while December futures gained 0.15 to 151.22. Meanwhile, August feeder cattle futures rose 0.47 cents to 214.95 cents/pound, and November feeders lifted 1.32 to 209.97.
CME hogs fell again Friday after trading mixed Thursday. Hog futures seemed to make a push earlier in the week to the get closer to CME index (now estimated at 80.21 cents/pound) but couldn’t top recent highs. Cutouts tumbled at midday Friday, but turned steady-weak in the afternoon. Still, ongoing cash weakness and huge hog supplies continue weighing onthe complex. The late-Friday pork firmness seemingly implied a steady opening this morning, but across-the-board Sunday night commodity weakness could infect hogs as well. August hog futures lost 0.50 cents to 75.50 cents/pound Thursday, while December dropped 1.12 cents to 60.45.
ICE cotton futures sagged to start the week despite firmness in equity index futures. Concurrent U.S. dollar strength, which may lead to a challenge of the greenback’s spring highs isn’t helpful to the bullish cause, since that raises the cost to export customers. Improved weather conditions, especially regarding soil moisture in Texas, point to much improved 2015 yields, although acreage has dropped sharply. The fact that bulls couldn’t force December futures back above their 40-day moving average late last week, suggests vulnerability to further selling. December cotton futures skidded 0.14 cents to 65.08 cents/pound early Monday morning, while May declined 0.31 cents to 64.68.