Demand strength seems to be supporting corn futures. After dropping in response to financial market events last Friday, the corn market is starting this week quite strongly. Talk of improving demand is probably playing a role in the gains, with news of firm spot quotes and a strong result on the weekly USDA Export Inspections report encouraging bulls. Traders may also be covering shorts ahead of Tuesday’s Supply/Demand (WASDE) report. May corn futures rebounded 2.5 cents to $3.885/bushel late Monday morning, while December added 2.0 to $4.1275.
Beans and meal also rallied Monday morning. As with the grains, there wasn’t a great deal of soy news over the weekend, with most reports centering upon the number of grain ships awaiting loading off of Brazilian ports. But that’s largely old news at this point. Reports that Chinese buyers are canceling an abnormally low number of U.S. bean purchases from U.S. buyers are probably encouraging bulls as well, although overnight palm oil weakness is weighing upon soyoil quotes. May soybean futures rallied 9.0 cents to $9.94/bushel around midsession Monday, while May sagged 0.21 cents to 31.07 cents/pound, and May meal marched $6.4 to $334.1/ton.
The wheat markets have bounced strongly to start the week. U.S. wheat prices posted surprisingly firm closes last Friday despite negative financial market influences and have continued rising to start this week. Wire service sources, argue that recent losses have made U.S. grain more competitive on the global markets. Traders may also be evening up positions ahead of tomorrow’s important WASDE report. May CBOT wheat climbed 10.0 cents to $4.925/bushel as the lunch hour loomed Monday, while May KC wheat ran up 9.75 cents to $5.32/bushel, and May MWE wheat rose 6.5 to $5.63.
Cattle futures couldn’t sustain early gains. Cash cattle prices leapt 3-4 cents to around 162 cents/pound ($/cwt) last Friday afternoon, which certainly suggested impressive seasonal strength and the potential for more of the same during March and April. However, traders may believe that last week’s CME rally had anticipated the cash advance, since the April contract couldn’t sustain today’s bullish opening. April cattle futures sank 0.57 cents to 154.07 cents/pound in late Monday morning action, while August cattle stumbled 0.47 cents to 144.45 cents/pound. Meanwhile, April feeder cattle futures fell 0.77 cents to 208.95 cents/pound, and August feeders tumbled 1.17 to 207.95.
Monday morning hog losses may have anticipated a seasonal decline. The recent surge in cash hog prices ran out of momentum late last week, so CME traders now seem to be anticipating seasonal weakness into early spring. Extremely large supplies aren’t encouraging either. April hog futures skidded 0.37 cents to 65.75 cents/pound just before lunchtime Monday, while June hogs slid 0.47 to 79.57.