Grain markets unable to sustain early-week gains at midday

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Nearby corn futures firmed Monday morning in the wake of news that an unknown buyer had purchased 100,000 tonnes of U.S. corn for delivery during the current crop year. That offered confirmation of talk that recent price declines have spurred export interest. The weekly Export Inspections report stated the latest figure at 15.74 million bushels, which topped the week prior figure by about 4.0 million; however, the weak futures reaction suggests it disappointed the industry. May corn had declined 4.5 cents to $7.04/bushel late Monday morning, while December fell 6.5 cents to $5.5025.

Soybean futures rallied modestly in reaction to the weekly USDA Export Inspections report, then set back as lunchtime loomed. The report stated the weekly result at 40.274 million bushels topped the week-prior total by almost 50% and exceeded the year-ago figure by about 21%. Traders apparently believe major logistical problems getting the massive Brazilian bean crop to export customers are transferring short-term demand to the U.S. Whether this phenomenon will persist for very long is open to question. May soybeans had slipped 2.5 cents to $14.4175/bushel around mid-session Monday, while May soyoil advanced 0.15 cents to 49.82 cents/pound, and May meal lost $3.30 to $426.0/ton.

The weekly Export Inspections report seemed supportive of wheat futures, since the latest figure moderately exceeded comparable week- and year-ago rates. Nevertheless, futures turned decisively lower, which reportedly reflected the improving moisture situation across the Great Plains and Corn Belt. Storm systems are reportedly set to hit the Northern Plains over the next two days, while the southern part of the country is looking at rain next weekend. Persistent precipitation may greatly improve the forthcoming winter wheat crop. May CBOT wheat futures plunged 17.5 cents to $7.03/bushel by late Friday morning, while May KCBT wheat dove 15.75 cents to $7.4025, and May MGE futures dropped 9.25 cents to $7.96.

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. However, pragmatic traders have almost surely noticed the limited strength exhibited by futures lately, which may signal a weaker outlook than is generally expected. April cattle edged 0.25 cents higher, to 130.20 cents/pound in late-morning activity, while August dipped 0.10 cents to 125.62. Meanwhile, April feeder cattle rose 0.47 cents to 144.62 cents/pound, while August gained .07 cents to 154.42.

Hog futures moved generally lower Monday morning, which probably marked a response to ongoing cash weakness. 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, which is expected to dip to 78.45 Tuesday. Bulls may have a hard time pushing futures higher as long as country values continue declining. April hogs slid 0.42 cents to 80.70 cents/pound late Monday morning, while June skidded 0.42 cents at 90.95.

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