Ag markets seem set to begin this week strongly

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After declining last week on improved planting prospects in early May, corn futures rebounded in reaction to diminished hopes on that front Sunday night. Forecasters worry that a cut-off low pressure system will dominate the Midwest later this week, thereby bringing intermittent rains and persistently cool temperatures to the region. That could further delay Corn Belt plantings. May corn surged 10.0 cents to $6.54/bushel early Monday morning, while December jumped 12.25 cent to $5.3625.

Tight spot markets seemingly supported nearby soybean and meal futures to start this week. However, the prospect of delayed corn plantings, which raises the possibility of a shift into soybeans if the spring situation doesn’t improve, depressed the deferred contracts. The vegetable oils markets were under pressure in Asia Sunday night, thereby going far toward explaining the early weakness in CBOT soybean oil values. May soybeans rose 0.75 cents to $14.315/bushel to start Chicago trading this week, while May soyoil dipped 0.36 cents to 49.30 cents/pound; May soybean meal added $2.7 to $420.6/ton.

The potential for declining wheat progress reports in the wake of recent frosts reportedly boosted wheat futures overnight. Traders also cited the potential for persistent delays in getting the spring wheat crop planted. That hardly seems conducive to larger U.S. production this year. On the other hand, talk of large European crops east and west of the Alps apparently limited gains at the U.S. wheat exchanges. May CBOT wheat futures climbed 4.5 cents to $6.9325/bushel in early Monday trading, while May KCBT wheat advanced 7.25 cents to $7.6375 and May MGE futures gained 3.75 cents to $8.15.

After proving mixed ahead of cash trading last Friday, live cattle futures responded poorly to news of a moderate country price increase later that day. The late decline suggests bulls were hoping for a larger advance. Still, the late-week surge in wholesale values, industry hopes for continued cash strength in early May and the late-week June futures close above its 40-day moving average seem to point to a firm start to CME trading this week. June cattle closed 0.30 cents lower at 122.60 cents/pound Friday afternoon, while December skidded 0.22 cents to 128.00. May feeder cattle futures fell 0.40 cents to 141.80 cents/pound, and August tumbled 0.98 cents to 151.17.

The hog market sustained its recent advance Friday despite the generally bearish market environment and mixed cash and wholesale news. Country prices east and west of the Mississippi River diverged significantly, while pork cutout dipped from its Thursday afternoon quote. Still, bullish traders have good reason to anticipate a major seasonal surge in cash hog and pork values during the coming weeks, which seems likely to translate into firm futures trading during the days just ahead. May hog futures climbed 0.37 cents to 89.35 cents/pound at their Friday afternoon settlement, while the June contract surged 0.70 cents to 92.52.

There was a dearth of news concerning cotton over the weekend, but that did not deter bulls from pushing futures sharply higher Sunday night. Weather forecasts suggest conditions are favorable for cotton plantings across the U.S. Southeast and Southern Plains. Ultimately technical and pragmatic factors probably sparked the overnight surge. July cotton leapt 1.68 cents to 85.93 cents/pound in pre-dawn Monday trading, while December gained 1.12 cents to 84.70.

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