The grain markets were in mixed early Monday trading as wet fields increased concerns about the forthcoming crops. Rainfall over the weekend was as expected and the 6-10 outlook now suggests continue above average moisture alongside below average temps. This afternoon’s USDA Crop Progress report may indicate another decline in condition ratings. Still, forecasts for fine July weather, along with major technical resistance, seem to be capping rally attempts. July corn futures rallied 6.75 cents to $3.60/bushel at Monday’s close, while gained 4.75 cents to $3.735.
The soy complex began the week quite strongly. Heavy rains over the central U.S. probably kept few beans from being planted last week, with many regions now beyond the deadline for full insurance coverage under USDA programs. Thus, ‘prevent planted’ acres could be relatively high this year. The fact that strong demand seemed to power a technical breakout in meal and bean prices last week, with oil also apparently trending higher, is likely encouraging bulls as well. July soybean futures leapt 18.0 cents to $9.895/bushel as Monday’s CBOT session ended, while July soyoil ran up 0.37 cents to 32.92 cents/pound, and July meal soared $10.5 to $333.6/ton.
Wheat futures advanced Monday, presumably in response to questions about the impact of heavy rains on the winter wheat harvest. The weekly Export Inspections numbers had little effect on prices. As in the corn and soybean markets, traders expect the Crop Progress report to indicate diminished winter wheat conditions and little winter wheat harvest progress. July CBOT wheat futures jumped 12.75 cents to $5.0125/bushel in late Monday trading, while July KC wheat climbed 8.75 cents to $5.12/bushel, and July MWE advanced 10.0 cents to $5.53.
Last Friday’s monthly USDA Cattle on Feed report stated May placement rates well below forecasts, thereby supporting deferred futures. Indeed, the nearby contracts also rallied despite last week’s sizeable cash losses. Ideas that the seasonal decline may be near its end, as well as big wholesale gains at midsession, may have encouraged bulls as well. August cattle futures surged 1.22 cents to 151.90 cents/pound as the Chicago pit session ended Monday, while December futures gained 1.32 cents to 155.85. Meanwhile, August feeder cattle futures spiked 2.35 cents to 225.77 cents/pound, and November feeders rocketed up 2.62 cents to 220.52.
Firm spot quotes may have limited Monday’s hog losses. Ongoing cash weakness and expectations for a massive annual increase in summer hog supplies depressed hog futures late last week. Moreover, Friday’s technical breakdown implied much more of the same during the days just ahead. However, futures seemed to stabilize at lower levels after the opening, which probably reflected relatively modest cash weakness and higher pork quotes at midday. August hog futures ended Monday having dived 1.45 cents to 72.37 cents/pound, while December tumbled 0.92 to 60.72.