Ag markets could be choppy in limited trading this week

Chinese news boosted corn futures to start the week. News that Chinese imports of U.S. corn had jumped 108% from the comparable year-ago level seemingly supported the corn market to start this week's trading. The rise might have been larger if not for the fact that futures are bumping up against major technical resistance. Markets could prove quite choppy due to low trading volume this week and next. March corn futures edged up 0.25 cent to $4.335/bushel in early Monday trading, while May gained 0.25 cent to $4.4175.

Persistent talk of Argentine dryness is supporting the soy complex. The soy and product markets rose modestly Sunday night, although was little apparent news. Asian palm prices rose again, thereby supporting soyoil values. Ultimately, forecasts for persistent heat and dryness over Argentina's soy growing areas probably provided much of the upward impetus. January soybeans rose 2.0 cents to $13.41/bushel early Monday morning, while January soyoil inched up 0.05 cents to 39.49 cents/pound, and January soymeal added $1.92 to $448.5/ton.

The surplus wheat situation seemed to depress US prices. The wheat markets apparently continue suffering from the implications of huge global stockpiles and favorable production prospects this winter. Diminished U.S. exports may also be undercutting domestic prices. March CBOT wheat futures slipped 1.0 cent to $6.125/bushel Sunday night, while March KCBT wheat futures were steady at $6.5725, as were March MWE futures at $6.505.

The COF report could boost futures today. Firming cash prices boosted cattle futures in early Friday trading, but prices apparently accelerated upward in reaction to a report that the U.S. and China are taking steps to ease the flow of American beef to the Asian giant. Technical factors also favored bulls. The moderately supportive USDA Cattle on Feed report could spark follow-through gains today. February cattle futures leapt 0.92 cents to 133.905 cents/pound in late Friday trading, while April futures surged 0.42 cents to 134.50. Meanwhile, January feeder cattle futures gained 0.17 cents to 166.97 cents/pound and March climbed 0.37 to 166.92.

Seasonal optimism probably limited Friday losses in CME hog prices. Big cash and wholesale losses posted late Thursday suggested the hog/pork complex has yet to reach long-anticipated seasonal lows. However, midsession developments, particularly a rebound in pork cutout, seemingly sparked renewed optimism about the winter outlook. Still, short-term weakness may weigh upon the Chicago market this week. February hog futures skidded just 0.12 cents to 86.25 cents/pound at their week-ending settlement, whereas June added 0.35 to 100.50.

Long-liquidation apparently sank cotton Sunday night. Cotton futures seemed set to break out to the upside last Friday, but failed late in the day. The weekly commitments of traders report was released soon thereafter, showing speculative buying had surged during the week prior. That news apparently sparked active selling when trading resumed, which in turn triggered a cascade of sell-stops. March cotton plunged 1.62 cents to 81.53 cents/pound just after sunrise Monday, while July cotton dove 1.31 cents to 81.58.