Grain, livestock markets diverged widely Monday

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After firming Monday morning on news of a sizeable export sale, corn futures turned downward later in the day. This was not an impressive performance, especially after the weekly Export Inspections report also seemed indicative of improving export demand. Ultimately, growing precipitation totals over the Great Plains and Midwest over the past two weeks apparently dragged the yellow grain market downward, since the water situation has improved substantially as a consequence. May corn ended Monday having declined 5.25 cents to $7.0325/bushel, while December fell 5.75 cents to $5.5025.

Soybean futures were rather directionless Monday morning, but surged later in the day on talk of tightening U.S. supplies. Brazil is obviously harvesting a massive crop, but is reportedly experiencing major difficulties in getting it moved to the international market. Meanwhile, North American prices are rising in response to strong short-term buying. One industry analyst reportedly stated that the U.S. could not sustain the recent shipments pace beyond mid-March, which very likely played a role in the late surge. May soybeans closed 18.5 cents higher, at $14.62/bushel Monday afternoon, while May soyoil advanced 0.59 cents to 50.26 cents/pound, and May meal climbed $4.4 to $433.7/ton.

As with corn, the wheat market apparently dropped in response to steady improvements in the moisture situation. That is, the snow that blanketed the Southern Plains in late February is being followed by systems likely to bless the Great Plains and Midwest with rain and snow here in early March. Not only could the winter wheat crop increase substantially as a consequence, so might the spring wheat crops set to be planted during the weeks just ahead. May CBOT wheat futures plunged 18.0 cents to $7.025/bushel late in the Monday trading session, while May KCBT wheat dove 17.25 cents to $7.38, and May MGE futures dropped 12.5 cents to $7.9225.

Cattle futures began the week firmly as traders anticipated seasonal strength. After surging last week, both cash and wholesale prices seem set to continue rising. March is traditionally the month of lowest cattle slaughter and beef production each year. Conversely, grocers may be gearing up for a big beef push the first weekend in April, especially with Easter Sunday coming on March 31 this year. April cattle rallied 0.35 cents to 130.35 cents/pound at the Monday afternoon close, while August moved 0.20 cents to 125.92. Meanwhile, April feeder cattle surged 0.57 cents to 144.72 cents/pound, while August gained 0.20 cents to 154.55.

Hog futures dropped substantially Monday, with pessimism about short-term cash and wholesale prospects seeming to dominate Chicago trading. For example, while the nearby April future has proven quite weak lately, it has actually held up much better than has the CME lean hog index; the latter is expected to dip to 78.45 Tuesday, whereas the April contract settled at 80.30 cents/pound Monday afternoon. Bulls will likely have a very hard time pushing futures higher as long as country values continue declining. April hogs slid 0.82 cents to 80.30 cents/pound at their Monday settlement, while June skidded 1.0 cent at 90.57.


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