Crude Drops $3 in One Minute
U.S. live-cattle and lean-hog futures were towed under by en-masse selling in commodities sectors on Monday, leading to sharp losses. Lean-hog futures closed sharply lower as technical moves were stoked by efforts to take profits in the wake of five straight sessions of gains. October hogs shed 0.9% to close at 73.37 cents a pound. December hogs lost 0.7% and settled at 73.35. The losses ended up narrower than earlier in the session. As with cattle, hogs fell through some key technical levels, which in turn sparked more selling.
The quick fall in live-cattle futures reinforced traders' building concerns that a recent run-up in cash prices, which has pushed them close to all-time records, is at risk of winding down. Although severe drought conditions have translated to sharply tighter supplies of cattle this fall, forcing a competition among beef packers to secure fresh loads of them, the failure of beef prices to keep pace could lead to production cuts.
Cattle for October delivery lost 1.2% to close at $1.255 a pound at the Chicago Mercantile Exchange. December cattle slid 1.3% to $1.283. Feeder-cattle futures were the day's lone winners, ticking upward due to the fall in feed prices, which can raise demand among buyers of young, hungry cattle. Feeder cattle for September gained 0.2% to $1.4532.
Wheat futures followed corn lower, and were also pressured by rains in parts of the U.S. Great Plains that will aid winter-wheat planting. Wheat prices also fell because rainfall in parts of Australia–a big wheat producer–helped ease concerns about drought conditions there. Most-active CBOT December wheat settled down 46 1/4 cents, or 5%, at $8.78 a bushel. Kansas City Board of Trade December wheat ended down 46 cents, or 4.9%, to $9.02 a bushel. Minneapolis Grain Exchange December wheat finished down 47 3/4 cents, or 4.9%, to $9.30 1/4 a bushel.
U.S. soybean futures fell 4% Monday, declining by their exchange-imposed daily trading limit, pressured by the ongoing U.S. harvest and favorable weather in South America, where farmers are getting ready to plant soybeans and other crops. Chicago Board of Trade soybeans for November delivery settled down 70 cents, or 4%, to close at $16.69 a bushel, their lowest level in a month. The exchange sets a 70-cent limit on one-day price moves in soybeans.
Cotton futures edged lower as the euphoria from QE3 began to fade. "Those gains (from QE3) should be short-lived," says Flanagan Trading's John Flanagan. "You can see the effects of after the QE3 — the dollar is back up and the stock market has backed off." Flanagan also expects demand from China to "start tapering off." He says the market "will probably find its first real support around 70 cents." ICE cotton for December delivery settled 0.8% lower at 75.33c/lb.
At the livestock auction held Friday in Siler City a total of 965 cattle and 144 goats were sold. Slaughter cattle trended mostly steady. M&L 1-2 feeder steers, 400-600 lbs., trended steady to 10.00 higher; heifers were steady to 8.00 lower. Average dressing slaughter cows brought $75-$84, with high dressing up to $89. Average dressing slaughter bulls, 1000 lbs. & up, sold from $92-$99. M&L 1-2 feeder steers, 400-500 lbs., brought $120-$169, 500-600 lbs. ranged from $130-$150. 400-500 lbs. M&L 1-2 feeder heifers ranged $115-$139 and 500-600 lbs. were $115-$132.
No. 2 yellow shelled corn trended 34 to 35 cents lower when compared to last report. Prices ranged $7.37-$8.23 at feed mills and $7.33-$7.73 at elevators. No. 1 yellow soybeans trended 70 cents lower and were $17.44 at processors, and $16.19-$16.79 at elevators. No. 2 red winter wheat trended 20 cents lower at $7.98. Soybean meal, f.o.b. at processing plants was $558.50 per ton for 48% protein.
Fruit and vegetable prices (shipping point f.o.b.): Greens: Demand moderate. Market about steady. Various containers bunched/loose Collard, Kale, Mustard, and Turnip Tops 6.00-7.00. Sweet Potatoes: Demand fairly good. Market about steady 40 pound cartons Orange Types U.S. No. 1 13.00-15.00 mostly 14.00-15.00 few higher occasional lower, U.S. No. 1 Petite 10.00-12.00 few higher, U.S. No. 2 7.00-9.00 mostly 8.00-9.00 few lower occasional higher, No Grade Marks jumbo 6.00-8.00 mostly 6.00-7.00 occasional higher and lower.
U.S. crude futures took a violent tumble Monday, dropping more than $3 in less than a minute on a huge spike in trading volume, shaking broader markets and sparking confusion across trading floors. At 1:54 p.m. EDT, light, sweet crude for October delivery plummeted to a low of $94.83 a barrel on the New York Mercantile Exchange after trading above $98 a barrel throughout the session. Volume surged to more than 12,500 contracts in a minute, after trading near 100 contracts for most of the session. Front-month October reformulated gasoline blendstock, or RBOB, settled 2.4% lower at $2.9433 a gallon. October heating oil dropped 2.4% to $3.1634 a gallon.
Natural-gas futures closed lower Monday for a third straight session on a forecast of milder weather that is expected to result in higher injections of natural gas later this week. Natural-gas futures for October delivery closed at $2.865 million British thermal units on the New York Mercantile Exchange, down 7.8 cents, or 2.7%.
Gold futures settled lower, while platinum snapped its 11-day winning streak as caution dominated Monday's trading. The most actively traded gold futures contract, for December delivery, settled down $2.10, or 0.1%, at $1,770.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
Wall Street lost some of the ground it gained on Friday, the Dow Jones Industrial Average dropped 40 points to close at 13553. Nasdaq fell 5 to 3178. The S&P closed at 1461, down 4.