Corn futures closed strongly higher on Monday. The market turned higher due to continued hot and dry conditions in Argentina over the weekend that further deteriorated crop conditions. Forecasts call for some rain this week before a warm and dry weather pattern develops again. Traders are beginning to gear up for the USDA reports due out on Thursday morning. USDA is expected to trim U.S. 2011 corn production and could raise the U.S. export forecast if Argentina’s corn crop estimate is lowered. March ended 8 1/2 cents higher at $6.52 and May was 8 3/4 cents higher at $6.59 1/2.
Soybean futures traded sharply higher on Monday. Hot and dry weather in Argentina is weighing on crop conditions and lower production potential. Weather forecasts call for rain midweek followed by another high pressure ridge that is projected to bring more hot and dry weather. The market is also beginning to gear up for the USDA reports due out on Thursday morning. Of increased interest will be if or how much USDA lowers its soybean production estimates for Brazil and Argentina. January closed 36 1/4 cents higher at $12.25 3/4 and March ended 36 1/2 cents higher at $12.33.
Wheat futures closed higher on Monday. Weakness in the dollar index, spillover support from corn and index fund repositioning helped support the futures market. The rebalancing by the funds is expected to lead to fund buying this week. After declining for six consecutive sessions, the MGE was also able to turn higher on spillover buying and short-covering. CBOT March gained 17 cents to close at $6.41 3/4, KCBT March ended 18 cents higher at $6.98 and MGE March closed 8 3/4 cents higher at $8.09 3/4.
Cattle futures closed mixed on Monday. Front end contracts were pressured by declining beef prices and steady to lower cash trade late last week. Cash trade developed at steady to $1 lower on a live basis and $2 to $4 lower on a dressed basis. Showlists are expected to be larger this week and weather remains favorable for feedlot performance. But deferred contracts rallied on strength in corn and weakness in the dollar index. February ended 53 cents lower at $83.38 and April was 25 cents lower at $124.35.
Lean hog futures traded mixed on Monday. Front end futures were pressured by concern about declining pork prices as traders wait for some evidence of improved seasonal demand. Summer month contracts and later were mostly higher on support from strength in corn prices that could slow herd expansion and weakness in the dollar which will benefit pork exports. February closed 53 cents lower at $83.38 and April was 78 cents lower at $86.98.