Beef Demand Remains Uneven
Lean hog futures finished mixed in choppy trading as early strength succumbed to long exits tied to weakness in outside markets and overriding concerns about the strength of pork demand. April hog futures fell 0.07 cent, or 0.1%, to 84.42 cents a pound in trading at the Chicago Mercantile Exchange. CME June hog futures rose 0.07 cent, or 0.1%, to 93.6 cents a pound. Outside markets added pressure late in the session as a round of short covering appeared to ease.
U.S. live-cattle futures closed mixed to start the week as choppy trading continued to reflect investors' overriding unease over demand for beef. Cattle for April delivery rallied 1.05 cents, or 0.9%, to close at 1.1937 a pound in trading at the Chicago Mercantile Exchange. June cattle finished down 0.05 cent, or close to unchanged, at $1.1577 a pound. Cattle futures have been spiraling downward since the beginning of March, when beef demand began to slow markedly. Record-level beef prices and rising gasoline costs have been pushing consumers toward cheaper grocery purchases, analysts say. Now, a round of negative news over a ground-beef filler product, dubbed "pink slime" by critics, is further weighing on demand.
Wheat futures ended mostly higher, drawing support from traders covering short positions ahead of Tuesday's crop reports. However, hard red winter wheat futures at KCBT fell on improved growing conditions for crops in the U.S. plains. CBOT May wheat ended up 4 1/2 cents at $6.43 a bushel, May KCBT wheat ended 2 cents lower at $6.60 and May MGEX wheat ended up 1 cent at $8.47.
Soybean futures ended lower, succumbing to profit-taking as well. "The market is terribly vulnerable to a downward price correction," said Anne Frick, senior oilseed analyst with Jefferies Bache in New York. Traders are factoring in the risk that USDA may not issue anything bullish in the report Tuesday, Frick said. "Tighter supplies and strong demand are fundamentally bullish, but we have priced in all these factors and at some point, South American crop production estimates will stop going down," she added. CBOT May soybeans dropped 3 cents to $14.31 a bushel.
Cotton futures advanced as India's Trade and Textile minister said the country wouldn't issue any new export permits for cotton, leaving about three-million bales of the fiber in limbo. The bales may or may not end up getting shipped, analysts say, but falling global demand and ample supply capped the market's gains. "I see U.S. cotton futures continuing in a wide if not painful sideway pattern in the remaining months of this crop year," says Penson Futures' Sharon Johnson. ICE cotton for May delivery settled 1.1% higher at 89.48c/lb.
Crude oil futures fell Monday, briefly brushing eight-week lows as talks between Iran and major powers set for later this week helped cool worries about conflict in the oil-producing region. Light, sweet crude for May delivery settled 85 cents, or 0.8%, lower at $102.46 a barrel on the New York Mercantile Exchange, after dipping as low as $100.81 earlier in the session. Front-month May reformulated gasoline blendstock, or RBOB, settled 4.38 cents lower at $3.2967 a gallon. May heating oil ended 2.33 cents lower at $3.1459 a gallon.
Natural-gas futures grinded out a small gain Monday, after a listless session with light volume and little momentum in either direction. Gas futures for May delivery ended the day up 1.8 cents, or 0.9%, at $2.107 a million British thermal units on the New York Mercantile Exchange. Still, the gain was the market's first in three sessions.
Gold rose Monday as traders bet last week's U.S. unemployment report increased the likelihood that the Federal Reserve would maintain its accommodative policy to boost the economy. The most actively traded contract, for June delivery, rose $13.80, or 0.9%, to settle at $1,643.90 a troy ounce on the Comex division of the New York Mercantile Exchange. Comex gold trading was closed Friday in observance of the Good Friday holiday.
The stock market had its first chance to respond to Friday's disappointing jobs report and the results were predictable. The Dow lost 130 points to close at 12929. Nasdaq dropped 33, closing at 3047. The S&P 500 finished at 1382, losing 15.