Stock Futures Continue Thursday’s Tumble

Stock Futures Continue Thursday\’s Tumble\r\n\r\n\r\nCould Mean Investment Shift Into Commodities\r\n \r\n\r\n   US stock futures overnight are tumbling, a follow-up to Thursday’s decline, say market analysts.  In turn, some are wondering if investors might relocate some of their investment money into commodities, including agricultural commodities.\r\n\r\n   Stocks fell Thursday in response to a lower-than-expected China Flash Purchasing Managers Index for January of 49.6, which shows economic contraction.  The pressure on stocks came in spite of a flash PMI for the Eurozone that was above expectations.\r\n\r\n   Poor quarterly corporate earnings also are stacking up, leading many investors to consider the cost of a share versus the expected dividend and conclude it’s time to take some profits, analysts said.\r\n\r\n   And some currencies are dropping in relation to the US Dollar – the Australian Dollar, the Argentine Peso and the Turkish Lira to name a few.  Plus, an announcement this morning that Argentina will end its ban on personal US Dollar purchases Monday could pressure the Argentine currency even more.\r\n\r\n   But if investors move their money out of stocks into commodities, prices likely will rise, not because they really need the underlying commodity, but because they see the purchase as only an investment opportunity after last year’s price declines.  This could hurt those who use the commodities like livestock and poultry producers, exporters, soybean crushers and ethanol plants.\r\n\r\n \r\n\r\nRain Makes Grain\r\n\r\n \r\n\r\n   But in the meantime, rain in dry parts of southern Argentina is easing talk of significant crop losses there, while declining currencies around the world are pressuring grain and soybean futures in overnight trading, market analysts said.  Excessive heat in Argentina also has abated with the rains.\r\n\r\n   The combination of cooler temperatures and more rain at pollination and pod fill times eases some production concerns and allows the market to remove some weather premium.\r\n\r\n   In addition, rumors of Chinese cancellations of US soybean orders persist, undermining soybean prices, which many see as overblown in relation to corn and wheat anyway, the analysts said.\r\n\r\n   Bitter cold in the central US is offering support to wheat.  Many fear winter kill in the unprotected crop.\r\n\r\n   Only light cash cattle trading was reported in the Plains states Thursday at prices that were steady with Wednesday’s limited action.  Cash cattle markets may be losing some luster after USDA’s boxed-beef values declined Thursday.\r\n\r\n   The choice cutout was reported at $238.55 per cwt, down $1.50 on the day, and the select cutout was off $0.51 at $236.93.  The choice/select spread narrowed to $0.51, and there were 107 loads of fabricated product sold into the spot market.\r\n\r\n   The CME Feeder Cattle Index for the seven days ended Wednesday was $170.23, down $0.18, while the Jan futures contract settled Thursday at $170.37 per cwt, down $0.10.