Markets Rebound After Monday’s Sharp Declines

Lean-hog futures rebounded as signs in cash markets continue to suggest the hog-farming sector is beginning to stabilize after a bruising month tied to knock-on effects from the severe U.S. drought. October hog contracts gained 1% to 74.1 cents a pound. December futures, the most actively traded, rose 1.2% to 74.2 cents. The hog complex closed higher for the fifth time in six sessions as traders continue to trade off signs that prices for hogs are flattening out after plummeting 26% in a month-long slide that lasted until late last week.

U.S. livestock futures also rebounded Tuesday from the broad market selloff the prior session, lifted by ongoing signs of firm demand for fresh slaughter supplies. Traders re-established long positions and others covered short positions as prices for cattle and meat in wholesale markets continue to suggest demand is at least firm, if not better. Although cattle futures fell 1.2% on Monday, as investors broadly cleared out of commodities markets, cash cattle prices remain just shy of all-time records they touched earlier this year. Cattle for October delivery rose 0.7% to $1.264 a pound at the Chicago Mercantile Exchange. They have gained 2.4% since late August. December cattle on Tuesday gained 0.4% to $1.2887 a pound. Feeder cattle were narrowly mixed, though front-month September contracts finished close to unchanged at $1.4527.

U.S. wheat futures traded higher Tuesday, stabilizing after Monday's sharp declines. Wheat prices were buoyed by concerns about drought in the U.S. Great Plains, where farmers are starting to plant winter wheat, and uncertainty about crops in other major wheat-producing countries that have experienced hot, dry weather. Chicago Board of Trade futures for September delivery gained 7 3/4 cents, or 0.9%, at $8.85 3/4 a bushel. Kansas City Board of Trade September wheat rose 8 1/2 cents, or 0.9%, at $9.09 3/4 a bushel. MGEX September wheat jumped 7 3/4 cents, or 0.8%, at $9.38 1/2 a bushel.

Cotton futures edged higher despite a bearish global supply/ demand picture. "To be honest, it doesn't really make sense to anybody," says INTL FCStone's Andy Ryan. He says that more large sales to China's cotton reserve could be behind the rise. "In that case you wouldn't know about it unless you were the trader who sold them the cotton," he adds. Weekly USDA export sales data will be released Thursday and could shed some light. ICE cotton for Dec delivery settled 0.9% higher at 76.02c/lb.

At the livestock auctions held Monday at Siler City, Turnersburg, and Canton a total of 1469 cattle and 44 goats were sold. Slaughter cows trended $3.50 to $21.00 lower, feeder steers were $1.00 to $9.00 lower, and feeder heifers trended $2.00 to $5.00 lower when compared to last week’s sales. Average dressing slaughter cows brought $49.00 – $82.50 with high dressing up to $83.00. Average dressing slaughter bulls, 1000 lbs. & up, sold at $90.00 to $98.50 with high dressing up to $104.50. M&L 1-2 feeder steers, 400-500 lbs. brought $119.00 to $148.00, 500-600 lbs. brought $123.00 to $149.00. 400-500 lb. M&L 1-2 feeder heifers ranged $116.00 – $147.00 and 500-600 lbs. were $105.00 – $130.00.

N.C. EGGS: The market is higher on all sizes. Supplies are moderate. Retail demand is good. Weighted average prices for small lot sales of grade A eggs delivered to nearby retail outlets: Extra Large 154.27, Large 153.50, Medium 129.51, and Small 90.00.

No. 2 yellow shelled corn trended 8 cents lower when compared to last report. Prices ranged $7.29-$8.15 at feed mills and $7.25-7.65 at elevators. No. 1 yellow soybeans trended 29 cents lower and were $17.15 at processors, and $15.90-$16.50 at elevators. No. 2 red winter wheat trended 14 cents lower. Prices were $7.84 at the elevators. Soybean meal, f.o.b. at processing plants was $541.40 per ton for 48% protein.

Crude oil futures retreated again Tuesday, falling for the second straight day amid rising anxiety about the global economy. In a sign that the lift from last week's round of quantitative easing may have run its course, front-month oil futures on the New York Mercantile Exchange closed at $95.29 a barrel, down $1.33, or 1.4%, from Monday. Brent oil futures slid $1.76 to $112.03 a barrel. Front-month October reformulated gasoline blendstock, or RBOB, settled at $2.90 a gallon, down 4.43 cents. Heating oil futures settled at $3.127 a gallon, down 3.63 cents.

Natural-gas futures dropped for a fourth day Tuesday, as record high inventories in the seasonal demand lull between summer and winter weighed on prices. Prices struggled through much of the trading day to hold above the $2.80 per million British thermal units level, which was the intraday low a week ago. But when that barrier was breached, flurries of selling sent front-month gas down 3.2%, to its lowest level since Sept. 7. October-delivery gas futures on the New York Mercantile Exchange settled 9.2 cents lower, at $2.773/mmBtu. The contract has skidded 29 cents, or 9.5%, since last Wednesday, when it settled at a six-week high above $3.06/mmBtu.

Gold futures gained slightly Tuesday in muted trading as traders weighed whether the market's rally after the U.S. Federal Reserve announced new economic-stimulus measures was running out of steam. The most-actively traded contract, for December delivery, rose 60 cents to settle at $1,771.20 a troy ounce on the Comex division of the Nymex.

Wall Street ended the day mixed with the Dow gaining 11 points to finish the day at 13564. Nasdaq closed unchanged at 3177. The S&P 500 fell just under 2 points to 1459.