Crop futures began the week rather poorly, but livestock markets

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DDG news sent corn futures lower Monday. Current weather forecasts continue pointing to ideal U.S. conditions, which weighed upon corn futures today. However, Sunday night news that China has stopped issuing import permits for U.S. distillers grains (ddg) apparently exaggerated the losses. July corn dove 8.0 cents to $4.51/bushel at their Monday close, while December lost 7.75 cents to $4.50.

 

Spillover corn weakness depressed meal and beans. New crop soy futures continue performing well despite widespread suspicions that the fall harvest will prove very large. There is some talk of demand shifting from old crop, but that isn’t at all assured. Meanwhile, traders were persuaded the Chinese shut-out of U.S. ddg imports would force that product back onto the domestic market, thereby undercutting meal and nearby bean futures. July soybeans stabilized at $14.57/bushel in late Monday trading, while July soyoil rallied 0.27 cents to 39.28 cents/pound, and July soymeal slumped $5.4 to $482.2/ton.

Dropping corn prices appeared to undercut the wheat markets as well. Traders seemingly suspect current conditions are boosting production prospects for SRW wheat traded in Chicago and spring wheat in Minneapolis, while doing less for Kansas City hard red wheat; that would explain the relative strength of the KC market. Technical selling may also have played a part, but bears were probably reacting to the big drop in corn futures as well. July CBOT wheat futures settled 5.75 cents lower at $6.125/bushel Monday afternoon, while July KCBT wheat slipped 1.75 cents to $7.3375 and July MWE futures slid 4.75 cents to $7.045.

Friday’s cash strength sparked fresh CME cattle gains. The cattle industry has been expecting a traditional drop in cash prices through spring, but country cattle prices actually rose last Friday afternoon. That news, along with its supportive implications, almost surely powered today’s big CME advance. August cattle jumped 1.97 cents to 143.27 cents/pound as the CME pit session ended Monday, while December climbed 1.30 cents to 148.60. Meanwhile, nearby feeder cattle leapt the daily 3.0-cent limit. August closed at 203.52 and October settled at 203.82.

Hog futures followed the cattle market higher. Hog traders rather clearly expect a big summer price surge, as indicated by recent contract highs in August futures. Today’s early wholesale strength likely encouraged such ideas, but CME traders also appeared most inspired by the big cattle gains, since that suggests persistent support from that sector. August hog futures advanced 0.80 cents to 130.10 cents/pound in late-Monday action, while December gained 0.50 cents to 95.10.


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