Grain markets relatively weak Monday at midday

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Corn futures rose moderately in probable response to export news. The yellow grain market slipped early Monday morning in an apparent reaction to improved moisture prospects as another winter storm moves across the Great Plains. However, news that exporters had recently contracted for moderate amounts of U.S. corn for both the 2012-13 and 2013-14 crop years seemed to boost the market. The slight rise in the face of wheat and soybean losses was rather impressive. March corn had risen 0.25 cents to $6.9075/bushel around midsession Monday, while December slipped 2.0 cents to $5.5075.

Soybean futures turned downward Monday morning in apparent reaction to talk that weekend Argentine weather had exceeded expectations. That is, meteorologists had recently predicted little relief for dry Argentine soybean fields in the near future, but weekend rains reportedly proved surprisingly large. Traders also seemed disappointed with the result of the weekly Export Inspections report, since the latest figure fell significantly below both week- and year-ago totals. March beans were trading 20.75 cents lower, at $14.405 late Monday morning, while March soyoil had fallen 0.74 cents to 49.61 cents/pound and March meal skidded $5.4 to $421.5/ton.

The winter storm moving across out of the Southern Plains this morning is apparently weighing upon wheat futures this morning. Moisture from the second major weather system in a week is almost surely improving production prospects for the forthcoming winter wheat crop. Moreover, weather forecasters are reportedly expecting more rain/snowfall in early March. The industry also seemed somewhat disappointed with the weekly Export Inspections report. March CBOT wheat futures had fallen 8.75 cents to $7.0625/bushel around midsession Monday, while March KCBT wheat lost 9.75 cents to $7.40, and March MGE futures lost 7.25 cents to $7.955.

Live cattle futures rose moderately Monday morning. Some might argue that the results of the February 22 Cattle on Feed report supported the market, but the advance may be largely weather driven. That is, feedlot cattle do not perform well in arctic conditions such as those that are dominating the Southern Plains today, which may served to reduce the supply of market-ready animals to beef packers. Extreme conditions have sparked major cattle rallies at times in the past. That seems rather unlikely at this point, but we certainly cannot rule out continued cattle strength. April cattle climbed 0.52 cents to 128.75 cents/pound in late-morning activity, while August gained 0.05 cents to 125.40. Meanwhile, March feeder cattle edged 0.05 cents lower, to 141.20 cents/pound, whereas August had climbed 0.72 cents to 155.00.

Weak cash and wholesale price prospects seemed to weigh upon CME lean hog futures again Monday morning. The Cold Storage data released last Friday was not particularly noteworthy, especially when viewed within the context of the current situation. Traders seem unlikely to sponsor the long side of the swine market until they see signs of cash and/or wholesale strength. On the other hand, futures are very oversold on a technical basis. April hogs had fallen 0.50 cents to 81.15 cents/pound late Monday morning, while June dropped 0.52 cents to 90.42.


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