A China report seemingly boosted the crop markets Monday night. The wheat markets benefited from bullish news overnight, but the other crops were largely on their own. However, a newswire report out of Beijing discussed the desire of Chinese officials to give the markets more influence in setting their domestic farm prices, thereby reducing huge state stockpiles and spending. That seemed to spur across-the-board gains. March corn rallied 4.0 cents to $3.7375/bushel in pre-dawn Tuesday trading, while July added 3.75 to $3.8925.
The soy complex also posted a broad advance. One could argue that Monday’s late equity index and energy sector surge and the overnight follow-through (as well as concurrent U.S. dollar weakness) boosted the bean and product markets overnight. Still, if China is truly moving toward a more open ag production system, that seems to hold significantly bullish implications for the long-term soy outlook. March soybean futures climbed 10.0 cents to $9.695/bushel early Tuesday morning, while March soyoil advanced 0.22 cents to 30.63 cents/pound, and March meal gained $4.3 to $332.2/ton.
The wheat markets are advancing as well. The China news probably supported the wheat markets along with the other markets, but international developments were also favorable. Numerous stories concerning tenders and sales were posted, but the big one was the item indicating Egypt tendered to buy about 100,000 tonnes of U.S. wheat. That suggests American grain is now more competitive on the global market. March CBOT wheat climbed 5.0 cents to $4.9775/bushel Monday night, while March KC wheat surged 5.25 to $5.3975/bushel, and March MWE wheat moved up 3.5 to $5.575.
Cattle bulls suffered a belated Monday decline. Chicago cattle posted a surprisingly firm opening Monday morning despite the generally bearish implications of last Friday’s biannual Cattle inventory report. The report is long-term in nature, so it usually doesn’t affect markets, but the sheer size of the reported herd increase seemingly took an increasing toll on cattle and feeder futures as the day passed. April live cattle futures plunged 2.67 cents to 149.60 cents/pound in late Monday action, while August cattle dove 2.43 cents to 141.62 cents/pound. March and May feeder cattle futures plummeted the expanded 4.50-cent daily limit to 200.70 and 201.62 cents/pound, respectively.
Talk of cash weakness seemingly undercut hog futures Monday. Last Friday’s CME hog losses apparently reflected the cash declines reported by the USDA later that day, since Monday’s Chicago opening proved relatively firm. However, midmorning reports of fresh cash market weakness seemed to drag futures lower once again. Big cattle losses probably exaggerated the drop. Conversely, the afternoon spot reports were generally mixed, which could spark buying this morning. April hog futures tumbled 1.32 cents to 70.92 cents/pound as CME pit trading concluded Monday, while June hogs dropped 0.97 cents to 83.12.
Cotton futures are threatening a bullish breakout. The cotton market has recently staged a surprising rally in the face of technical resistance. Traders are optimistic about the global outlook, especially if recent equity index gains truly presage robust demand and analysts are correct in predicting big 2015 planting reductions. Overnight Chinese news implying fewer subsidies for its cotton farmers also seems supportive. March futures topped the 60-cent level overnight, which suggests a significant move in either direction may soon occur. March cotton futures rose 0.38 cents to 60.27 cents/pound shortly after dawn Tuesday, while the July contract edged up 0.22 to 61.19.