Corn futures are expected to open steady to 2 cents higher on Monday. Corn prices traded as much as 6 cents higher overnight, but the gains had eased as the end of trading approached. There was some pressure on corn prices from outside markets, with Dow Jones futures down by more than 100 points and oil prices also lower. But fundamentally the old crop corn market remains bullish and that is providing support to futures contracts. Export inspections are forecast to be near the 34 million bushels needed to stay on pace to reach the 1.7 billion bushels export forecast for 2011/12.
Soybean futures are forecast to open mixed but mostly higher. Overnight trade started with solid gains for soybeans, but most of the gains evaporated. As was the case for corn, soybean futures were pressured by weakness in outside markets. But the bullish fundamentals, especially for new crop soybeans, held prices in positive territory. Weekly export inspections are expected to be above the level needed to stay on pace to reach the crop year forecast, and USDA may raise the forecast in the monthly update that will be released tomorrow morning.
Wheat futures are expected to open mixed but mostly higher on Monday. Chicago contracts were a little higher in overnight trade while prices in Minneapolis were a little lower. Wheat market fundamentals are generally bearish, but generally stronger prices for corn and soybeans have been providing some support for wheat markets. There is some concern about crop damage from cold temperatures over the next couple of nights but for the most areas the wheat plants are not yet at a stage where severe damage is likely. Export inspections are expected to be bearish on Monday morning.
Cattle futures are expected to open steady to 30 cents higher on Monday. The cattle and beef sector are facing some serious challenges. The beef cutout value has dropped sharply in recent weeks and processing margins are very poor. Recent developments, especially the uproar over the use of lean finely textured beef, i.e. pink slime, has dampened demand for hamburger and about have the beef sold is sold as hamburger. While the controversy is dying down, there are few signs consumers are coming back to beef. Cash cattle prices are expected to start the week steady to $1 lower with the supply of feeder cattle up compared with last week’s level. Beef demand usually improves after Easter, but this may not be a typical year.
Lean hog futures are forecast to open mixed on Monday. Hog futures finished last week with solid gains and there is hope that the buying will carry over into Monday. Traders want to believe that hog prices will turn higher as they usually do at this time of year and that the problems in the beef sector will spill over and support hog futures. But at least so far there is not much evidence that these thighs are happening. Cash hog prices did move higher last week, gaining almost $4 but the pork cutout value continued to decline. With futures prices already far above cash prices, we might not get a big increase in futures even if cash markets improve.