Grains settle lower on Monday

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Corn futures ended lower. Widespread rain over the weekend, particularly in the northwestern Corn Belt, helped recharge soil moisture just as planting is set to ramp up. Weather forecasts for late this week and next week call for a warmer/drier pattern to emerge which should aid planting. Planting progress as of Sunday is expected to be at record pace for mid-April at 15% to 20%, up sharply from 7% a week ago and only 6% last year. However, USDA indicated that due to issues with their servers, the Crop Progress report normally released this afternoon will be delayed until Tuesday afternoon. May corn settled 6 cents lower at $6.23 1/4 and December was 10 1/2 cents lower at $5.26 1/2.

Soybean futures settled lower on Monday. Favorable rains over the central Midwest during the weekend brought needed moisture to a number of growing areas where soils had been too dry for good germination. Concerns persisted on Monday about China’s announcement on Friday that its GDP grew slower than expected in the first quarter. There were also worries about the Euro crisis with the latest focus on Spain. May futures closed 16 3/4 cents lower at $14.20 while November dropped 11 3/4 cents at $13.50. 

Wheat futures closed strongly lower Monday. They opened lower on improving weather conditions for wheat both in the U.S. and in Europe. Even though there have been violent storms and hail over the Southern Plains through the weekend, actual crop losses are thought to be minor for the crop as a whole, though localized losses were severe in some places. The only real change through the course of trading was that MGE futures were down only slightly compared to CBOT or KCBOT in midday trade, but ended the day down double-digits, nearly as hard as the KCBOT, while CBOT futures were down the least by the close. Outside markets were not a factor. To the contrary, outside markets should have been supportive for wheat but were ignored. CBOT May closed 7 ¼ cents lower at $6.16 ½; while KCBOT May closed 12 ½ cents lower at $6.30 ½ and MGE May closed 10 ½ cents lower at $8.13 ¾.

Cattle futures were mixed. Futures trade was choppy. Early gains faded on technically based selling and weakness in commodity markets generally. However, futures bounced back late in the session amid further gains in the beef market. After moving higher on Friday, beef prices were strongly higher again on Monday. This has been the strongest two days for the beef market since prices peaked in late February, suggesting that beef demand may finally be improving. June cattle futures settled 8 cents higher at $116.15. August was 3 cents lower at $119.03. 

Lean hog futures fell sharply again on Monday. Carryover selling from Friday's collapse coupled with the lowest pork prices since the end of 2010 pressured hog futures on Monday. The pork cutout is 20 percent below year ago levels, and hog processors are losing money. As a result packers will cut back on slaughter which reduces demand for hogs. There are no real signs of the seasonal increase in prices that is typical for this time of year. The May contract closed at $88.55, down $1.58. June was $1.50 lower, settling at $88.73.

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