The crop market rallied over the weekend
Weather news reclaimed center stage in the grain and soy complexes late last week, with concerns about excessive moisture through early June boosting corn and soybean prices in particular. Weekend storms seemingly confirmed those worries, since they dumped substantial rains upon larger areas of the Corn Belt. Thus, July corn surged 6.0 cents to $6.68/bushel in Sunday night trading, while December advanced 4.25 cents to $5.715.
Traders fear that major delays to soybean plantings will substantially reduce yields next fall, which probably accounts for a great of the strength exhibited by soy futures late last week. Wet weekend weather implied that Corn Belt producers will have a hard time in getting everything planted in a timely manner. Indeed, those concerns have apparently outweighed the idea that extensive corn acreage will be forced into soybeans and boost the total harvest. July soybean futures jumped 27.0 cents to $15.37/bushel in early Monday trading, while July soyoil futures rose 0.27 cents to 48.66 cents/pound, and July soybean meal leapt $10.2 to $457.4/ton.
Ideas that spring wheat plantings will be greatly delayed may have boosted Minneapolis futures over the weekend, but the Chicago and Kansas City markets also rallied significantly despite ideas that ongoing rainfall will help the U.S. winter wheat crop. The general rise was probably driven by talk of widespread global trading over the weekend. For example, Saudi Arabia, Iran and Morocco all reportedly bought or were seeking wheat Saturday and Sunday. July CBOT wheat futures climbed 8.75 cents to $7.1425/bushel early Monday morning, while July KCBT wheat rose 5.5 cents to $7.565, and July MGE futures advanced 5.75 cents to $8.2575.
Cash cattle prices proved surprisingly firm last week despite expectations to the contrary. Late week wholesale slippage was not helpful either. Nevertheless, stubborn producers held out for and got steady prices late that day, which sparked a sizeable bounce in CME futures. Although seasonal factors suggest persistent weakness, active grocery industry buying could give the livestock complex an early-June boost. June cattle rallied 0.95 cents to 121.30 cents/pound as it settled last Friday, while December added 0.87 to 125.85. Meanwhile, August feeder cattle futures gained 0.15 cents to 144.32 cents/pound, and November edged 0.37 cents higher to 149.72
The bullish market response to news of a planned Smithfield Foods take-over by a large Chinese firm continued last Friday. Late-week reports indicating cash and wholesale strength probably supported CME hog futures as well. The supportive cash cattle news very likely provided additional upward momentum. Traders probably expect more of the same through the first half of June. June hog futures rose 0.30 cents to 95.62 cents/pound last Friday, while December inched up 0.02 cents to 80.70.
There seemed to be no news concerning cotton over the weekend, so it was somewhat surprising to see prices had rallied strongly Sunday night. Actually, the rise was not terribly surprising, since the July future had declined for nine straight sessions. The fact that bulls proved unable to force a larger decline after penetrating 80-cent chart support last Friday probably sparked widespread short-covering to start this week. The Monday morning combination of equity gains and dollar losses was also supportive. July cotton futures bounced 1.28 cents to 80.64 cents/pound early Monday morning, while December gained 1.23 cents to 83.29.
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