Grains start the holiday week on a firm note
The corn market has jumped over 10 cents in midmorning trading. The December contract was trading near $7.40. Commodity markets globally are higher. One factor is optimism that there will be an agreement in Washington to avoid the so-called fiscal cliff at the beginning of 2013. Without an agreement, economists worry about a new recession in 2013. Middle East tensions are boosting buying interest in crude oil with gains of over $2 per barrel. Trade sources cited technical buying interest associated with the December contract trading back over the 20-day moving average as another bullish factor.
The soybean market is higher in mid morning trading. January futures have traded up by about 15 cents to just shy of the $14 benchmark. Commodity markets globally are higher. One factor is optimism that there will be an agreement in Washington to avoid the so-called fiscal cliff at the beginning of 2013. Without an agreement, economists worry about a new recession in 2013. Middle East tensions are boosting buying interest in oil, and that is adding to buying interest for soyoil. Forecast maps indicate heavy rains likely in the central Argentine soybean belt later this week. Those would cause more planting delays.
Wheat futures are modestly higher in midday trade. Very warm temperatures are expected in the central and southern Plains states this week, with little rain. This will likely stress a 2013 winter wheat crop already showing the smallest portion rated “good” to “excellent” since the mid 1980s. This afternoon USDA will issue another weekly crop condition report expected to show further decline in conditions from last week. At midsession CBOT December wheat is up 7 at $8.60 ¾; KCBT December up 5 at $8.97 and MGE December up 3 ¼ at $9.24 ¼.
Cattle futures are trading higher in light trade at midday Monday. The December live cattle contract is up by about 42 cents at midday and feeder cattle contracts are also higher. Friday’s Cattle on Feed report was generally considered neutral to bullish with feedlot placements down 12.5 percent during October. The solid $1 to $2 gains in the cash market late last week have also been supportive for cattle futures in early trading. At midsession December cattle are up 42 ½ at $130.45; December feeders up 62 ½ at $126.77.
Lean hog futures are posting good gains at midday on Monday. The cutout value increased by nearly $1 per cwt on Friday, which has given the nearby contract a boost in early trading. The cutout is still down significantly from levels earlier in the month and cash prices are also down. With cash hog prices far below the December futures, there is some question about how long the futures price rally can last. At midsession, December hogs are up $1.17 ½ at $87.62 ½; February up $1.15 at $87.60.