Ag commodities get lift from outside markets

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The corn market jumped over 10 cents Monday in following the lead of global commodity markets. Traders were increasingly optimistic that there will be an agreement in Washington to avoid the so-called fiscal cliff at the beginning of 2013. Without an agreement, economists worry about a new recession in 2013. Middle East tensions boosted buying interest in crude oil with gains of over $2 per barrel. Following the EPA ruling on the ethanol mandate on Friday, this was more bullish news for demand. Trade sources cited technical buying interest associated with the December contract trading back to the 20-day moving average as another bullish factor. At the close, December was up 11 ½ at $7.38 ¾; March up 11 ½ at $7.42 ½.

Soybean markets rebounded on Monday, but gains came up short of recovering all of the losses on Friday. At the close, January was up 11 1/2 cents at $13.84 3/4. New-crop November gained 14 1/4 cents to close at $12.76 3/4. December soybean oil gained 84 points. December meal was unchanged, although other months gained $1 to $3 per ton. Commodity markets globally are higher on optimism that there will be an agreement in Washington to avoid the so-called fiscal cliff at the beginning of 2013. Middle East tensions boosted buying interest in crude oil, and that supported soyoil. Argentina sees risks for more planting delays. At the close, January beans were up 11 ½ at $13.94 ¾; March up 14 at $13.82.

Not even a very positive environment for commodity investment in the outside markets Monday could keep wheat from giving back most of its early gains to close only steady to slightly higher Monday. Weekly export shipments were within the range of pre-report expectations, but at the low end. A strong day for corn failed to have any coat-tail tug on wheat. Even a CFTC report Friday showing Trading Funds in a short-covering mode for a 3rd straight week failed to sustain early gains. At the close, CBOT December was 4 higher at $8.57 ¾; KCBT December unchanged at $8.92 ¾; MGE December up ¼ at $9.21 ¼.

Cattle futures closed higher Monday, but well off the day’s highs. Friday’s Cattle on Feed report was generally considered neutral to bullish with feedlot placements down 12.5 percent during October. The solid $1 to $2 gains in the cash market late last week were supportive for cattle futures in early trading, with futures up over 40 cents. But anticipating a holiday sag in beef demand, selling dominated into the close, with December live cattle closing only 15 higher at $126.60 and January feeders up just 22 ½ at $145.82 ½ at the close after being up more than 60 cents at midsession.

Lean hog futures are posted good gains Monday, though off the triple digits gains we saw at midsession. The cutout value increased by nearly $1 per cwt on Friday, which gave the nearby contract a boost in early trading. The cutout is still down significantly from levels earlier in the month and cash prices are also down. With cash hog prices far below the December futures, there is some question about how long the futures price rally can last, and we saw that today as selling became the bigger driver into the close. Nonetheless, December still closed 85 higher at $81.17 ½; February up 92 ½ at $87.37 ½.

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