Corn prices are trading 5 to 10 cents higher Monday morning. Corn futures prices are getting off to a strong start this week. The rally is fueled in part by more rain in Argentina, which continues to delay corn planting. Weather problems in Argentina should be positive for U.S. corn exports, but so far the export sales pace is disappointing. A weaker U.S. dollar in early Monday trade is also providing support to the corn market. The March corn contract has been moving mostly sideways since September but is near the top of the trading range. If we get some positive news on the export front, prices could break above resistance around $7.77 per bushel.
Soybean prices are up about 15 cents early Monday morning. Wet weather in Argentina is helping to support soybean futures and so is the modest weakness in the dollar. Technical factors have improved for soybean futures recently even though the overall trend has been down since early September. The export business remains very strong and inspections are expected to be bullish again in this morning’s report. There is not much noncommercial buying in the soybean market, with the number of contracts held by noncommercials down by almost 12,000 contracts in the latest weekly report.
Wheat prices are trading 5 to 10 cents higher Monday morning. The drought in the Plains states is helping to fuel the rally in wheat prices and there is essentially no rain in the forecasts for the area. Kansas City March wheat prices have been moving generally sideways in a wide trading range since July. Export sales and shipments continue to be disappointing, and Monday’s inspection report is not expected to be any different. The modest decline in the value of the dollar, plus the good gains in the corn and soybean markets should carry wheat prices higher Monday morning.
Cattle futures are expected to open mixed on Monday morning. After a standoff that lasted most of last week, packers were able to buy a few head of fed cattle at prices $1.50 to $2 lower than those of the previous week. Since trade volume was light all the way through last week, showlists are expected to be large as we start this week. But on the other side of the market, packers still need to buy a lot of cattle for this week’s expected slaughter. Cattle futures prices fell sharply on Friday and there may be some follow-through selling at the beginning of this week. Preliminary data suggests that feedlot placements in November were low again, probably down by 10 percent or more from 2011 levels.
Hog prices are expected to start the day higher on Monday. Cash prices finished the week strong with the national average price up by almost $4. Prices have increased by almost $9 since just before Thanksgiving. The pork cutout hasn’t kept pace and packers’ margins continue to shrink. Still packers will need to continue to buy to fill retail orders for the upcoming holidays. There are signs that hog producers didn’t cut back on the breeding herd very much. Recent data shows sow slaughter running about 3.5% below year ago levels over the past several weeks. That could mean more prok that expected by early next year.
Cotton prices are trading 10 to 30 points higher early Monday. The market posted a good short-covering rally late last week and that trend is expected to continue into early Monday morning. The March contract has rallied by nearly 4 cents per pound since bottoming out at the beginning of November. Cotton export sales have been strong recently and shipments are running above year ago levels. Still, the market faces high stock levels and it will be hard to drive cotton prices up to much during the winter months when the market’s attention is focused on demand.