Weather concerns seem set to dominate the crop markets this week. Anticipated weekend rains over the Corn Belt were very light or nonexistent. Moreover, a high pressure ridge seems set to boost heat and dryness in late August and early September. Talk of potential for an early frost next month may have encouraged bullish corn traders as well. September corn jumped 8.5 cents to $4.8225/bushel in Sunday night trading, while December surged 8.25 cents to $4.7175.
The soy complex leapt early Monday morning. Soybeans routinely set and fill pods most actively during the month of August, which renders the crop most vulnerable to heat and drought during late summer. That essentially explains the big gains posted in response to forecasts for summery conditions later this week and all of the next. September soybeans leapt 21.0 cents to $13.0425/bushel around dawn Monday, and November beans spiked 19.25 to $12.785. September soyoil climbed 0.32 cents to 43.13 cents/pound, while September soymeal bounded $7.0 higher to $415.8/ton.
Wheat resumed its recent pattern of tracking corn and soy moves Monday. That is, while the wheat markets are probably less dependent upon short-term forecasts than are corn and soybeans, the former tracked the latter higher in Sunday night action. This seems unlikely to end soon. September CBOT wheat advanced 5.5 cents to $6.365/bushel early Monday morning, while September KCBT wheat rose 5.5 cents to $7.0375, and September MGE futures gained 5.5 cents to $7.4275.
Cattle futures were mixed in volatile trade last Friday. Prices were supported by recent wholesale strength and news that Merck has suspended sales of its Zilmax growth enhancer. Technical factors and concerns about demand strength in late August partially offset rally attempts. However, sizeable cash gains Friday evening could spark major gains today. Most-active October cattle futures dipped 0.17 cents to 127.92 cents/pound in late Friday trading, while December gained 0.17 cents to 130.05. September feeder cattle bounced 0.60 cents to 157.67 cents/pound, and November rose 0.27 cents to 160.30.
Lean hog futures declined substantially Friday. Although cash and wholesale markets had proven stunningly strong through early August, traders apparently became concerned about the downside potential for the complex, because production routinely surges from midsummer through fall and pork demand diminishes after Labor Day. Still, Friday afternoon news of wholesale firmness may spark fresh CME buying, especially if cattle futures lead the way higher. October hog futures closed 0.57 cents lower at 86.72 cents/pound Friday afternoon, while December skidded 0.57 cents to 83.45.
The cotton market gave bark large portions of its Friday surge Sunday night. There was little news, so the setback probably had a technical component after bulls proved unable to push nearby futures to fresh highs Sunday evening. We also suspect Southeastern rains proved less excessive than was anticipated. December cotton futures sank 0.57 cents to 92.75 just after sunrise Monday, while March dipped 0.37 cents to 89.67.