Argentine planting delays lift soybean and corn prices

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Corn futures settled slightly higher. Futures were 10-11 cents higher early, but gains faded through the day as wheat and beans also pulled back from early highs. Delivery notices were light at 246 contracts. Weekly export inspections were disappointing at 9.6 million bushels versus expectations in the low-to-mid 20s. Poor exports weighed on prices. The outside markets were generally positive with the dollar lower and other commodity markets mostly higher. Too much rain will further delay planting in Argentina. March corn settled 2 cents higher at $7.54 3/4. December 2013 was 4 1/4 cents higher at 6.39 3/4.

Soybean prices reversed course from Fridays selling and began the new month with strong gains. Bulls continue to press prices higher promoting the view that extreme wetness in major growing regions of Argentina will eventually reduce soybean yields and perhaps the number of acres seeded. There is also talk of too dry weather in southern Brazil, although rains are forecast for later this week. At the close, January beans were up 15 cents at $14.53 3/4 while November 2013 gained 12 3/4 cents at $13.17 1/4. January soybean oil rose 47 points at 50.21 cents. The January meal contract gained $3.70 to close at $438.60.

Wheat prices opened strong in overnight trade and remain modestly higher through midday, but could not hold on to gains and moved to the minus side in the last hour of trading to close lower. Continued drought conditions in the Plains states and the poorest final fall crop condition ratings for winter wheat in nearly two decades were a supporting factor early on. A reported sale of wheat to price-sensitive Egypt that included some of U.S. origin was another supportive factor, as was weakness in the U.S. dollar index, which helps export competitiveness further. But what changed through the trading session were rain forecasts for the Plains that began to grow in both coverage and amounts. That stimulated a sell-off, even though most winter wheat is now gone into dormancy. Any moisture that falls lessens odds of winterkill and potentially helps soil moisture recover since the crop itself draws little or no moisture during dormancy. At midsession, CBOT March wheat was down 2 3/4 at $8.60 3/4; KCBT March was down 6 1/2 at $9.06 3/4; and MGE March was down 5 1/2 at $9.31 1/4.

Live cattle futures closed higher Monday on a late rally near the close. Surprisingly weak cash trade late week pressured cattle futures on Friday and additional selling pressure was evident in futures on Monday. Cash cattle traded $1 to mostly $2 lower in the Plains at $125. Outside markets were positive, though, providing underlying support. Preliminary data suggests that feedlot placements in November were low again, probably down by 10 percent or more from 2011 levels. February cattle closed 37 points higher at $130.77.

Lean hog futures settled lower on Monday after being higher early in the day. Hog futures started the day strong with traders generally bullish about cash market fundamentals. At midday, prices were mixed with nearby futures contract up, but deferreds slipping into the red. By settlement time, all contracts had turned lower. The February contract ended settled at $86.68, down $1.25. June was 63 cents lower at $100.90. The weakness in hog futures was surprising with almost all cash markets reporting higher bids on Monday. Cash prices are still below nearby futures, but the gap is closing. Cash prices are being supported by strong demand for hams for the holidays. Once that demand is filled, prices could turn lower.

Cotton prices managed to close higher once again on Monday, but off the day’s highs about midway in the daily trading range. The market posted a good short-covering rally late last week that punched through important overhead resistance on the charts and confirmed a genuine uptrend. Better manufacturing indicators in China are a supporting factor, as well as reports that Australian cotton producers have slashed their cotton acreage for harvest in 2013 by 30%, far more than originally expected. Cotton export sales have been strong recently and the growing evidence of a sustained downtrend in the U.S. dollar will only further enhance U.S. export competitiveness. At midsession, March cotton was right up against the long-term downtrend line on the chart, but could not punch through and then gave way to selling. March closed up just 7 points, at 73.90.

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