Crop markets trading higher Monday morning
The corn market is expected to open higher on Monday. Corn futures are generally about 6 cents higher this morning. There is little new news to move the market, but weather forecasts call for more rain in Brazil and Argentina. That is good news for the crops that have been planted but will probably cause further planting delays in some areas, which could affect corn production. The December contract has been basically flat for the past week, near $7.25 per bushel. There is good technical support under the market and the recent decline in volatility could induce some non-commercial buying.
The soybean market is trading about 15 cents higher this morning. The effects of the weather forecasts for Brazil and Argentina are mixed, with additional rain helping the land that has been planted, but causing even more delays where planting is still underway. The market has been trending down since early September, losing nearly $4 from the $17.66 recorded September 4. The market is considered to be oversold but the chart still looks bearish.
Wheat prices are about 5 cents higher to start the week. Traders expect the winter wheat condition ratings to decline again in the weekly report that will be released this afternoon. But the demand side continues to look weak. Export inspections are expected to be well below the more than 23 million bushel total needed to stay on pace to reach the current USDA forecast. With the year nearly half gone, the pace of sales and shipments will need to accelerate soon to get to the 1.1 billion bushels in the forecast.
Cattle futures are expected to open slightly higher on Monday. Cash cattle prices were higher at the end of last week and the data in the monthly Cattle on Feed report was neutral to bullish. Cattle feedlot placements last month were down 12.5 percent compared to year ago levels. The combination of low placements in both September and October could create a significant hole in marketings and beef production early next year. The cattle feedlot inventory at the beginning of the month was down 5.4 percent from the November 1, 2011 level.
Hog prices are expected to open modestly higher on Monday. The pork cutout value ticked up by nearly $1 on Friday which should support hog prices in early trading. However, the June contract is already nearly $20 above the December contract and the December contract is well above current cash hog prices. These factors could keep a lid on ant futures price rally. Both hog slaughter and hog weights were down last week compared to 2011 levels.
Cotton futures prices are trading lower early Monday morning. There is no real new news to move the market but futures prices have rallied over the past week. The export sales report last week was positive, with the highest weekly total so far in the marketing year and cotton shipments have been strong. Still, global demand is weak and there seems to be plenty of cotton available. Open interest continues to decline as traders exit the cotton market.
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