Corn futures are trading about 6 cents higher Monday morning. Grains posted solid gains on Friday and the upward momentum is carrying over to Monday. Corn export sales and shipments remain relatively weak, but domestic demand is strong. Stronger prices for soybeans are helping to support the corn market. The trend in the December corn contract is up with the price early Monday at its highest levels since November 9. Export inspections are expected to be below the 24 million bushels needed to stay on pace for USDA’s forecast.
Soybean prices are up 5 cents to 10 cents cents early Monday. Most soybean contracts gained between 7 cents and 10 cents on Friday with commercials buying. That suggests more export sales will be reported in the next few days. Weather conditions are mixed for South America with favorable conditions in most of Brazil, but wet conditions in key areas of Argentina. Further planting delays are expected in Argentina. Export inspections are expected to stay strong, well above the 21 million bushel weekly average needed to reach the USDA’s forecast.
Wheat prices are generally 4 to 7 cents higher Monday morning. Warm, dry and windy conditions continue to plague the Southern Plains, putting stress on the 2013 winter wheat crop. Prices are also being supported by gains in the corn and soybean markets. While prices have trended higher the last few days, the longer term trend is still down. The export inspection figure is expected to fall short of the 24 million bushels needed to stay on pace to reach USDA’s crop year forecast.
Cattle prices ended last week on a strong note. Live cattle futures ended with gains of around 70 cents to $1 on Friday and feeder cattle prices were also up. Cash cattle prices were higher last week and feedlots are expected to ask for still higher prices this week. Trade volume was light in the cash market last week, leaving packers short on inventory as the week begins. Cattle processing margins declined last week with prices for cattle rising faster than cutout values. Margins are said to be the smallest since April. Cattle weights are staying well above year ago levels.
Lean hog futures are expected to open mixed on Monday. Prices were generally a little higher on Friday due mostly to spill over from the cattle market. The most recent data shows sow slaughter running below year-ago levels suggesting that the herd reduction this quarter may be more modest than many people had expected. That could impact cash hog prices in late winter and early spring. Packers appear to be short bought for this week which could lead to stronger cash bids. However, supplies are also expected to be large, with slaughter usually increasing the week after Thanksgiving.
Cotton prices are a little higher Monday morning. Cotton prices generally fell sharply on Friday while most other commodity prices were up. It appears that Friday’s sell-off was more of a technical correction than a change in market fundamentals. The data for export sales was actually very positive on Friday, but both sales and shipments are still behind year-ago levels. The amount of cotton ginned is a little ahead of the 2011/12 crop year pace.