Corn futures reacted sharply to the USDA reports. The USDA’s Crop Production figure, at 13.763 million bushels fell well short of pre-report estimates averaging 13.98 billion bushels. The ending stocks figure on the WASDE report also fell significantly, so it was not at all surprising to see corn futures reverse early losses. September corn climbed 6.25 cents to $4.72/bushel as trading wound down Monday, while December gained 10.75 cents to $4.64.
The soy complex built upon sizeable pre-report gains. Soybean futures rallied strongly after an early Monday morning report indicated sizeable buying from China. Prices followed through upon the early gains after the late-morning USDA reports, which stated the forthcoming crop below expectations; the gains may have been limited by the relatively modest downward revision to expected ending stocks. September soybeans leapt 38.0 cents to $12.565/bushel at their Monday settlement, while November beans soared 43.0 to $12.2525. September soyoil spiked 0.88 cents to 42.38 cents/pound, while September soymeal zoomed up $12.1 to $402.7/ton.
The wheat markets also responded well to the USDA data. Despite the fact that the USDA left its U.S. production estimates unchanged, wheat futures rallied Monday. Increased usage forecasts and lower predictions for 2013/14 ending stocks encouraged buying, as did concurrent corn and soybean gains. September CBOT wheat closed up 1.5 cents to $6.35/bushel late Monday, while September KCBT wheat rallied 3.0 cents to $7.0025, and September MGE futures surged 4.75 cents to $7.3675.
Cattle futures surged in response to Friday’s cash strength. Cash cattle prices posted a surprising $2.00/cwt gain last Friday afternoon. After having seen country values prove unable to rebound from summer lows for weeks, CME futures traders reacted quite strongly to that news Monday, especially since they probably expect more of the same during the days and weeks ahead. October cattle climbed 0.53 cents to 127.40 cents/pound at the end of the day, while December added 0.77 cents to 129.47. September feeder cattle tumbled 0.47 cents to 157.00 cents/pound in reaction to the corn gains, and November slid 0.37 cents to 160.00.
Lean hog futures rallied in concert with cattle Monday. The underlying strength implied by Friday’s cash cattle rally and the bullish response by CME prices, seemingly spilled over into the hog pit. The fact that pork cutout also rose substantially last Friday despite a decline in fresh pork belly values probably encouraged buying as well; reports of midday pork slippage seemingly did little to discourage bulls. October hog futures settled 1.22 cents higher at 86.20 Monday afternoon, while December advanced 1.0 cent to 83.05.