Ag markets getting off to a poor start this week

Corn resumed its late-week decline Sunday night. CBOT traders apparently remain worried about the possibility of persistent Chinese rejections of U.S. corn shipments contaminated with an unapproved GMO strain this month. Thus, corn futures continued their breakdown begun late last week. March corn futures dropped 4.0 cents to $4.215/bushel early Monday morning, while May lost 4.0 cents to 4.2975.

Soybeans proved unable to build upon Friday's late rally. Little substantive news concerning soybeans emerged over the weekend, although oil market bulls could point to a bounce in palm oil values. Nevertheless, traders were seemingly unwilling to push prices higher despite Friday's surprisingly strong close. One has to suspect they're still concerned about good South American weather and increased production from that region. January soybeans fell 4.25 cents to $13.2325/bushel as the week's trading got underway, while January soyoil dipped 0.03 cents to 39.80 cents/pound, and January soymeal slid $1.7 to $430.9/ton.

The wheat markets continued sliding to start this week. Huge 2013 global wheat production and the resulting stockpiles are rather obviously weighing upon prices. Weekend trade news and talk of a big increase in Russian grain production probably added to the general pressure. March CBOT wheat futures tumbled 3.75 cents to $6.25/bushel in pre-dawn Monday action, while March KCBT wheat futures declined 2.0 cents to $6.705, and March MWE futures skidded 1.25 cent to $6.5925.

Diminished cash expectations reportedly weighed upon cattle futures last Friday. After improving around midweek, cash market expectations dimmed Friday. Indeed, country prices posted around the close indicated a $1/cwt (cent/pound) decline from the week prior. Still, wintry weather, limited feedlot supplies and seasonally declining marketings seem likely to limit losses during the days and weeks ahead. February cattle futures settled 0.25 cents lower at 132.85 cents/pound Friday afternoon, and April futures slipped 0.32 to 133.80. Meanwhile, January and March feeder cattle futures ended the week having stabilized at 167.07 and 166.55 cents/pound, respectively.

Hog futures reacted poorly to the last week's pork news. Hopes for renewed seasonal strength as country hog prices rose Wednesday and Thursday supported swine futures. However, a near-unanimous Thursday dive in pork prices set the stage for a poor CME showing Friday. Persistent midsession weakness seemingly caused traders to forget any short-term cash strength. February hog futures dove 0.82 cents to 87.17 cents/pound in late Friday action, while June sagged 0.30 to 99.50.

Chinese news depressed cotton futures over the weekend. Cotton futures rallied strongly last week, but weekend news started this week on a poor note. Not only did Chinese officials announce that their November cotton imports had fallen 43% below the comparable year-ago figure, they also announced that they are raising their benchmark for calculating import tariffs. Those seemingly presage persistently weak import demand. March cotton futures sank 0.66 cents to 82.56 cents/pound just after sunrise (EST) Monday, and July cotton slumped 0.34 cents to 81.93.