South American weather forecasts boosted crop futures Sunday
Corn futures rose slightly in Sunday night-Monday morning trading. The latest weather news for Southern Brazil and much of Argentina apparently boosted prices, since the latest forecast models imply that region will be blessed with little precipitation this week and that showers expected next week will be light. Weather news seems likely to dominate the corn and soybean markets for several weeks. March corn gained 3.0 cents to $7.39 in early-morning trading, while December added 2.75 cent higher to $5.9475/bushel.
The soybean market posted a significant advance to start the week. As in the corn pit, forecasts for South American dryness this week almost surely boosted prices in overnight trading, especially since rainfall prospects for next week are not very promising either. Given the need for moisture by South American crops at this time of year, harvest prospects may suffer over the short term. March soybeans jumped 13.5 cents to $14.8775 per bushel in pre-dawn electronic activity, while March soyoil climbed 0.40 cents to 53.39 cents/pound and March meal surged $4.4 to $432.6/ton.
Wheat futures also rallied Sunday night and Monday morning. The persistent drought over the Southern Plains probably continued providing background support, but the weekend rise may simply have marked a response to buying spilling over from the corn and soybean markets. March CBOT wheat futures rose 4.25 cents to $7.69/bushel; March KCBT wheat matched that increase, to $8.26 and March MGE futures surged 5.25 cents to $8.57.
The short-term outlook for live cattle futures is uncertain in the wake of events after the Friday afternoon close. They ended last week rather poorly, with persistent slippage in wholesale prices undercutting the markets back up the production chain. The biannual USDA Cattle report concerning the domestic population could undercut summer futures, since it indicated yearling supplies outside feedlots were only slightly below year-ago levels, whereas the surprisingly small 2012 calf crop could boost the deep deferred contracts. The market was also hit by Friday afternoon news that Russia will temporarily ban U.S. all beef and pork exports starting February 11. This issue was raised repeatedly in January, so it may have less impact than one might think. April cattle closed 0.57 cents lower, at 132.17 cents/pound last Friday, while its August counterpart fell 0.65 cents to 128.67. March feeder cattle were down 0.35 cents to 149.20 cents/pound at that time, while August dipped 0.17 to 160.07.