Corn futures are struggling against short-term resistance. Corn futures surged in response to very good export news last Friday, but the nearby March contract failed to top resistance associated with its 10-day moving average. That seemingly left it open to technical selling, particularly with early-week equity slippage and fresh U.S. dollar strength suggesting demand weakness. March corn slid 2.5 cents to $3.8425/bushel Sunday night, while July lost 2.75 to $4.00.
The looming South American harvest seemed to depress the soy complex. Brazil is set to harvest another record soybean crop, which will very likely be supplemented by large Argentine supplies as well. CBOT traders clearly worry about the additional supply and a probable shift of China’s buying to those countries. Weekend crude and palm oil losses also weighed on soyoil and beans. March soybean futures declined 4.25 cents to $9.685/bushel early Monday morning, while March soyoil fell 0.29 to 31.31 cents/pound, and March meal sagged $0.7 to $330.7/ton.
The wheat markets started the week in mixed fashion. The global wheat outlook still seems bearish since the markets are well supplied and current growing conditions seem quite favorable. However, the Russia-Ukraine situation continued simmering over the weekend, thereby sustaining elevated concerns about wheat supplies from that region. Futures were narrowly mixed as a consequence. March CBOT wheat slipped 0.25 cent to $5.3975/bushel in predawn Monday trading, while March KC wheat dipped 0.5 cent to $5.635/bushel, and March MWE wheat skidded 0.75 to $5.7525.
Fund liquidation seemed to scuttle the livestock markets Friday. Concerns about commodity deflation and sinking export prospects seemed to spur fresh commodity fund liquidation late last week. The relatively elevated levels recently reached by the livestock markets, particularly those in the cattle sector, seemingly exaggerated the reaction. Thursday’s southern Plains losses probably encouraged bears as well. Falling beef quotes also suggest a poor Monday opening. February and April live cattle futures plunged the 3.00-cent daily limit to 150.50 and 148.80 cents/pound, respectively, at Friday’s CME settlement. January feeder cattle futures fell 2.27 cents to 213.70, and March feeders plummeted 4.50 to 201.82.
CME hogs extended Thursday’s big bearish move. Persistent early-January losses in the cash hog and pork markets were not particularly severe. However, the downtrend seemed to accelerate Thursday, thereby sparking a big CME breakdown. Moreover, the drop rendered the swine market vulnerable to selling related to deflation concerns. Spot prices ended Friday modestly lower, which may presage a firmer Monday opening. February hog futures closed 2.30 cents lower at 69.30 cents/pound Friday, while June hogs dove 2.95 cents to 80.20.
Cotton futures posted a surprising bounce Sunday night. No news pertinent to cotton prices emerged over the weekend, so it would have been easy to anticipate a follow-through to last Friday’s slide. Last night’s combination of weakness in equity index futures and concurrent U.S. dollar strength also looked bearish. And yet, cotton future advanced. One has to suspect a broad increase across the softs sector powered the cotton rise, but the reason for it was not at all apparent. March cotton futures rallied 0.43 cents to 57.73 cents/pound shortly after Monday’s New York sunrise, while the July contract climbed 0.30 to 59.41.