Favorable weather depressed crop prices to start the week

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Favorable weather seems to be weighing on the crop markets. With spring corn plantings reportedly nearing completion, forecasts for persistent showers this week seem to favor increased production. When combined with diminished Black Sea tensions, this news is putting pressure on grain and soy complexes. July corn sank 6.25 cents to $4.7175/bushel Sunday night, while December lost 6.75 cents to $4.685.

Weather news appears to be depressing the soy complex as well. Although a large portion of the nation’s soybean crop likely hasn’t been planted, the current situation still seems to favor a sizeable crop. One also has to wonder if early-spring price trends and wetness persuaded many producers to shift more acreage to beans. The fact that new-crop prices led the way lower Sunday night suggests such ideas are in play. July soybeans dove 15.5 cents to $15.00/bushel early Monday morning, while July soyoil slid 0.05 cents to 40.33 cents/pound, and July soymeal tumbled $5.4 to $497.2/ton.

Wheat markets are also suffering from weather and Black Sea news. Current U.S. rainfall may prove a major blessing to the winter wheat crop. And while spring wheat plantings continue lagging, current moisture still favors a larger fall crop. Meanwhile, news out of the Ukraine points to reduced political problems in that region, which in turn points to increase grain output. July CBOT wheat futures fell 9.75 cents to $6.4275/bushel shortly after dawn Monday, while July KCBT wheat dropped 7.25 cents to $7.3775, and July MWE futures dipped 5.0 cents to $7.205.

Cattle traders likely expect continued cash losses. Despite recent wholesale strength, CME cattle traders clearly believe recent cash losses will persist through late spring. Seasonally increasing cattle supplies traditionally depress prices as they did last week. June cattle plunged 1.30 cents to 136.30 cents/pound as pit trading ended last Friday, while December dove 1.20 cents to 144.25. Meanwhile, August feeder cattle crashed 2.52 cents to 192.85 cents/pound, and October plummeted 2.40 cents to 194.10.

Cash and wholesale losses continued undercutting hog futures last Friday. After rallying strongly in response to good news Wednesday, CME lean hog futures ended the week badly. Sustained weakness in cash and wholesale values almost surely played a big role in the drop, since the summer contracts are still trading at substantial premiums to spot quotes. June hog futures tumbled 0.75 cents to 116.85 cents/pound at Friday’s CME settlement, while December crept up 0.07 to 95.12.

Cotton futures also got off to a slow start Sunday night. Weekend rainfall will probably encourage Texas farmers to boost cotton plantings during the days ahead, and certainly seems likely to get the crop off to a good start. ICE futures declined Sunday night as a result, but seemed to find support at last Friday’s lows; that might presage a technical bounce. July cotton dropped 0.61 cents to 85.70 cents/pound shortly after sunrise Monday, while December cotton tumbled 0.75 to 78.72.

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