Ag markets proved generally mixed Monday night

Crop futures struggled at technical resistance Monday night. Wire service reports indicated that large crop prospects were offsetting recent buying based on delayed harvesting last night. Monday's big drop in stock index futures probably didn't help. But we would also point out that December futures are challenging technical resistance associated with their pivotal 40-day moving average. December corn futures edged up 0.25 cent to $3.4625/bushel early Tuesday morning, while May rose 0.25 cent to $3.6775.

The soy complex is bucking grain weakness. Although corn and wheat markets declined overnight, soybeans and meal moved higher. That may reflect robust demand, but traders may also be reacting to the negative implications of ongoing harvest delays. Bulls also cited generally lower bean yields in the western Corn Belt than in the east. November soybean futures rallied 8.0 cents to $9.5325/bushel Monday night, while December soyoil slumped 0.08 cents to 32.96 cents/pound, and December soymeal gained $2.6 at $320.5.

The wheat markets were comparatively weak. There is little fresh news concerning the wheat situation, but prices lost ground Monday night. One wonders if the big equity market drop and concurrent U.S. dollar rebound raised concerns about global demand strength, since the stock drop pushed the S&P index below its 200-day moving average for the first time since November 2012. December CBOT sank 1.75 cents to $5.035/bushel in predawn Tuesday trading, while December KC wheat skidded 0.75 cents to $5.835/bushel, and December MWE wheat slid 1.75 to $5.57.

Cattle traders may be worried about Monday's stock drop. Although seasonal and fundamental factors look very supportive of the cattle outlook, futures traded mixed Monday night. That probably reflects the negative demand implications of the late-Monday breakdown in the equity indexes, which are often seen as harbingers of the economic outlook. December live cattle futures dropped 0.25 cents to 166.45 cents/pound as the Tuesday dawned over Chicago, while April futures rose 0.07 to 165.97. Meanwhile, November feeder futures advanced 0.30 cents to 240.45 cents/pound and January feeders climbed 0.37 to 234.50.

Hog futures are also trading in mixed fashion Tuesday morning. As was likely expected by traders Monday, the cash hog and wholesale pork markets were stated mostly lower in late afternoon reports. However, the losses seemed muted, which may explain why futures didn't post across-the-board losses last night. December hogs fell 0.25 cents to 94.37 cents/pound in early Tuesday action, while April added 0.12 to 91.97.

Cotton is also testing moving average resistance. The cotton market performed well Monday, with the December contract ending the day just under its 40-day moving average. It set back from that level overnight, possibly due to technical selling. But the Monday afternoon breakdown in stock index futures and the subsequent dollar bounce may also be undercutting optimism about apparel demand. December cotton futures dipped 0.07 cents to 64.95 cents/pound shortly after dawn Tuesday, while March futures inched up 0.02 cents to 62.52.


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