Tyson's Surprise Move Sends Commodity Complex into Overdrive
The commodity complex saw increased activity on Monday morning after a relatively quiet weekend. Market-moving headlines from the US president's War on Iran and Russia's War on Ukraine dominated the news, but it was Tyson Foods' reallocation of cattle processing resources that drew attention in the cattle markets. The move didn't change US cattle supply and demand, yet both live and feeder cattle futures markets were hit by significant selling late last week.
Grains were mostly higher overnight, with corn leading the way. Despite continued rains over the weekend, the corn market rallied during the overnight session, gaining as much as 4 cents on trade volume of 25,000 contracts. The December contract was near its session high at this writing.
Soybeans also saw a rally in pre-dawn trading, with some analysts attributing the strength to Brazilian weather rather than US conditions. The November-January futures spread covered 54% calculated full commercial carry compared to 53% the previous week, while the Brazilian crop led March-May covered 22% versus 27%.
The wheat sub-sector was an outlier in a generally higher grains market, with both winter markets in the red to start the day. The December SRW issue dropped as much as 7 cents on trade volume of about 12,500 contracts.