Ag markets are quiet ahead of today's USDA reports

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Corn probably suffered from position squaring Sunday night. The USDA will release its latest Crop Production and WASDE reports later this morning, which could significantly affect the ag markets. Given the general lack of weekend grain news and recent gains, it wasn’t terribly surprising to see future dip at the start of the week. March corn slid 2.25 cents to $4.42/bushel early Friday morning, while May lost 2.5 to $4.475.

Oil strength seemingly gave soybeans a weekend boost. Underlying strength in the global soyoil markets and a weekend bounce in Asian palm oil values seemed to give soy¾an futures a boost Sunday night. South American weather news seemed rather bearish. Lifting of meal/oil spreads very likely depressed meal futures. As in the grains, traders are looking forward to today’s USDA reports. March soybeans rose 2.0 cents to $13.335/bushel in early Monday trading, and March soyoil jumped 0.51 cents to 39.07 cents/pound, but March soymeal slipped $0.7 to $445.7/ton.

Wheat began the week on a poor note. A portion of that weakness may reflect forecasts for improving weather later this week, but traders are probably unwilling to be overexposed when the USDA releases its monthly report late this morning. March CBOT wheat futures declined 3.0 cents to $5.745/bushel in pre-dawn action Monday, while March KCBT wheat futures sank 2.5 cent to $6.4675, and March MWE futures skidded 1.0 to $6.3825.

Bullish expectations apparently boosted cattle futures last Friday. Nebraska cattle traded lightly at sharply lower prices Thursday afternoon, which seemingly reflected bearish short-term expectations. Indeed, midday Friday trade matched the Thursday quotes. Nevertheless, CME prices turned sharply higher late Friday morning, which apparently resulted from widespread short-covering. Traders seemingly expect a bullish cash reversal in mid-to-late February. April cattle futures jumped 1.32 cents to 140.40 cents/pound at Friday’s settlement, while August leapt 0.85 cents to 130.57. Meanwhile, March feeder cattle surged 0.80 cents to 167.80 cents/pound, and May ran up 0.62 to 169.20.

Hog futures may have benefited from spillover strength Friday. Cash hog and wholesale pork prices proved mixed Thursday afternoon, thereby limiting early Friday gains. However, hog futures turned decidedly higher as the day passed. That may have reflected concurrent equity market strength (and optimistic implications about the economic outlook) as well as the late-morning cattle surge. Bulls may also been hearing reports of cash/pork strength from those markets. April hogs climbed 0.52 cents to 94.72 cents/pound at their Friday close, while June increased 0.30 to 105.35.

Cotton began the week in mixed fashion. Forecasts from the National Cotton Council released over the weekend may have undercut new crop prices, since the expected 8% increase in U.S. cotton acreage apparently depressed December futures slightly. March dipped, whereas the July contract posted a modest gain. Traders are likely positioning themselves ahead of this morning’s USDA reports. March cotton sagged 0.12 cents to 87.35 cents/pound just after sunrise (EST) Monday, while July cotton gained 0.11 to 87.22.


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