Grains start the week lower
Corn futures are trading 2 to 3 cents lower early morning. Corn futures are starting the week off lower on pressure from the bean market induced by heavy weekend rains across the Midwest. The 2012 corn crop is not expected to benefit much from the recent rains and so pressure surrounding the market is mostly due to speculative selling. The long term fundamentals are unchanged and bullish as production output is expected to decline quite a bit due to drought conditions.
Soybean futures are trading 28 to 31 cents lower early morning. Favorable weekend rains pressured soybean futures during the overnight session. The new crop is currently in its critical reproductive stage and heavy weekend rains helped to replenish soil moisture and revive the heat stressed crop. As with corn, the longer term outlook remains bullish as production yields are still expected to decline.
Wheat futures are trading mixed early morning. Spillover pressure for the lower corn and soybean prices are weighing on wheat futures. As of this writing futures at the CBOT and KCBT are trading unchanged to 4 cents lower while prices at MGE are higher. The market should see support from continued reductions to wheat estimates in key wheat producing countries.
Live cattle are called to open mixed this morning. Cattle futures are anticipated to open uneven pressured by sliding beef prices while supported by expectations for higher cash prices. However, if hog futures post moderate losses as was the case on Friday; cattle futures may be on the defensive much of the session.
Lean hogs are called to open mixed this morning. Market prices are expected to open on both sides of the market after significant losses on Friday. Prices are expected to see some support from market short covering, while pressure is expected to be seen by lower cash prices.
Cotton futures are trading higher this morning. News that Indian monsoon rains are expected to be inadequate for 2012 sparking drought concerns are lifting prices early morning. Prices are also seeing support as traders square positions ahead of today’s crop progress report.