Corn futures closed solidly higher on Monday. Weakness in the dollar index, strength in the cash market and continued talk about a smaller-than-expected corn crop in Argentina due to the hot and dry growing season supported the market. Weekend rainfall was disappointing in key corn growing regions in Argentina. The Agriculture Minister lowered its crop estimate to 23 million tonnes from early expectations of up to 30 million tonnes. March ended 8 1/2 cents higher at $6.20 and May was 9 cents higher at $6.25 3/4.
Soybean futures traded sharply higher on Monday. Weather concerns for the soybean crop in South America and weakness in the dollar pushed prices higher. Weekend rainfall was disappointing in key soybean growing regions in Argentina and forecasts call for stressful crop conditions to return to southern Brazil. The ag ministry in Argentina cut its soybean production forecast to 48.9 million tonnes from 52 million to 53 million last month. March closed 30 1/2 cents higher at $12.17 1/2 and May was 30 cents higher at $12.25 1/2.
Wheat futures were higher on Monday. The market was supported by weakness in the dollar index and spillover support from corn and soybeans. Short-covering was also a factor following the break in prices after the USDA reports earlier this month. However, gains were limited by bearish global supplies and demand fundamentals. World wheat supplies remain abundant. CBOT March was 9 1/4 cents higher at $6.19 3/4, KCBT March ended 6 1/2 cents higher at $6.73 1/2 and MGE March closed 4 1/2 cents higher at $8.03 1/4.
Cattle futures closed higher on Monday. The nearby contract is at a discount to the cash market last week, but gains were limited by concern that current prices are unsustainable given the poor processing margins for packers. The Cattle on Feed report Friday afternoon was near trade expectations. Placements were 94% of year ago, but cattle on feed are still up 3% compared to last year. February ended 5 cents higher at $124.60 and April was 45 cents higher at $128.18.
Lean hog futures were strongly higher on Monday. The market was supported by pork cutout values being up 87 cents on Friday and the steady to firm tone in the cash market. USDA reported pork in storage as of the end of December at 475.8 million pounds. Traders were expecting a small increase, but instead stocks fell 3.3 million pounds from the previous month. February closed $1.15 higher at $86.48 and April was $1.45 higher at $88.50.