Corn futures favored a slightly higher tone in overnight trade, but sharply extended gains during daytime trade before backing off the highs to end with solid gains of 5 1/4 to 6 3/4 cents in the 2016 contracts, with far-deferreds up around 7 to 9 cents. Funds were net buyers of an estimated 16,000 corn contracts (80 million bu.) today. Idea last week's late losses were overdone, a weaker tone in the U.S. dollar index and talk last week's 136,000-MT corn sale announced by USDA is Brazil's first purchase of U.S. corn in nearly two decades provided support. Additional support came from a wet near-term forecast, which would slow planting across the Corn Belt. Rains are also in the forecast for much of Brazil this week, which could ease concerns about a shortage of safrinha corn.
Soybean futures faced pressure overnight, rallied as much as 30-plus cents higher this morning, but pared gains by the close to finish 12 3/4 to 14 3/4 cents higher for the day. Traders took early losses as a bargain buying opportunity, calling into question ideas the market had put in a short-term top last week. The front-month ended just 1/4 cent above the $10.00 mark, while other old-crop contracts settled above that psychologically significant level. Fund buying has played a major role in the recent rally, so traders will continue to monitor money flow. Today they purchased a net 15,000 soybean contracts (75 million bu.). Traders expect USDA's initial update on planting progress to show around 3% of the U.S. soybean crop has been seeded. An early start to the planting season for corn and spring wheat makes it less likely acres will be switched to soybeans.
Wheat futures ended mostly 3 to 4 cents higher in SRW contracts, fractionally to a penny higher in HRW contracts and 1 to 4 cents higher in spring wheat contracts. That was near mid-range for all three markets today. Wheat futures were boosted by spillover from soybeans and corn, along with a weaker U.S. dollar today. But improved weather in the Plains and expectations winter wheat crop ratings will improve in this afternoon's update from USDA curbed buyer interest into the close. Funds returned to the long side of the market after being sellers the final two days last week. Today funds bought an estimated 4,000 (20 million bu.) SRW wheat contracts. Speculative money flow remains the primary "fundamental" driving price action. It's unlikely that's going to change anytime soon.
Live cattle futures closed 82 1/2 cents to $1.95 higher, finishing near their highs of the day. Cattle futures rallied in the final 90 minutes of trade to close near their highs of the day. Cattle futures saw weaker to mixed trade during the bulk of the early session on the steep $7 dive in cash prices to the $127 area last week. However, the slightly better-than-expected Cattle on Feed and Cold Storage Reports released late Friday provided some light early buying support. This morning's wholesale trade data was mixed, with Choice beef up 99 cents but Select beef down 41 cents. Movement was again solid at 79 loads. Slaughter today is estimated at 110,000 head, even with a week earlier and up from 106,000 head a year ago.
Lean hog futures faced pressure on the open but eventually improved to mixed trade. The market settled split with May through July futures 5 to 77 1/2 cents lower, and deferred contracts slightly higher. Lean hog futures saw additional spread trading today, as nearbys were increasingly pressured by their wide premium to the cash hog index. While cash prices and thus the index have climbed in recent sessions, traders note the May contract's $7-plus premium to the index is overdone. On a more positive note, the pork cutout value edged out a 46-cent gain this morning and, even more encouraging, movement was solid at 192.52 loads. This will add to already strong packer profit margins that have given them incentive to keep kill lines full. Last week, they processed 3.5% more hogs, resulting in 3.5% more pork relative to year-ago.
May cotton futures finished 169 points higher, but that as only mid-range for the day. Deferred months ended slightly higher. Cotton futures were supported by weakness in the U.S. dollar, which helped fuel additional corrective buying. There also continues to be some speculation China may need to come to the market for cotton supplies as mill supplies are thought to be tight since the Chinese government won't start auctions of state-owned reserves until next month. That's supporting the lead-month May contract. Traders anticipate cotton planting will remain behind average in USDA's update this afternoon. Planting delays are not strong enough to provide active support to new-crop futures, however. That's largely why new-crop futures are lagging the front-month contract on the price recovery.