Russia/Ukraine situation greatly affected the ag markets Monday
Russia’s invasion of Crimea sent grains higher to start the week. Russia invaded the Crimean region of Ukraine over the weekend and may have the whole country in its sights. The potential implications of that news, including grain trade disruptions and/or embargoes sent the grain and soy markets soaring Sunday night. Corn backed away from early highs despite a supportive Export Inspections result, but ended the day quite firmly. May corn surged 7.0 cents to $4.705/bushel in late Monday trading, while December ran up 5.0 to $4.765.
The soybean complex couldn’t sustain Sunday night gains. Although soybeans aren’t all that big of a crop in the Black Sea region, Russia and Ukraine certainly grow much more than in the past. Traders are likely considering substitution effects as well, since a disruption of wheat exports from that area could spur soy usage. Ukraine’s position as a major sunflower oil producer boosted soyoil. However, after rallying strongly Sunday night, nearby beans and meal ended the day lower. May soybeans fell 4.75 cents to $14.0925/bushel at Monday’s close, while May soyoil leapt 0.59 cents to 42.38 cents/pound, and May soymeal turned $7.5 lower to $450.5/ton.
The wheat markets led the way higher to start the week. The possibility that a conflict between Russia and Ukraine will greatly disrupt Black Sea exports and/or cause the U.N. or the Western Powers to boycott Russian wheat sent futures dramatically higher Sunday night. The weekly Export Inspections report was also supportive. In addition, current cold may be hurting U.S. winter wheat. May CBOT wheat futures soared 29.25 cents to $6.315/bushel at their Monday settlement, while May KCBT wheat futures spiked 26.0 cents to $7.00, and May MWE futures vaulted 16.25 to $6.725.
Cattle futures turned mixed Monday. CME traders seem uncertain about likely short-term cattle and beef prospects in the wake of last week’s big surge. Despite another midsession jump in beef cutout, the nearby April future closed lower on the day. Conversely, large discounts in deferred futures seemed to support those contracts. The prospect of higher feed costs may also have boosted the deferreds. April cattle futures slid 0.85 to 144.12 cents/pound as CME pit trading ended Monday, while August climbed 0.62 to 133.25. Meanwhile, April feeder cattle were flat at 173.07 cents/pound, while August stalled at 175.57.
Bulls pushed hog futures higher again today. Big cash and wholesale gains posted last Friday apparently encouraged bullish traders to buy hog futures aggressively again today. Bullish expectations built upon robust demand and seasonally tightening supplies continued spurring active buying despite less-than supportive midsession news. April hogs leapt 1.82 cents to 108.67 cents/pound at Monday’s close, while June climbed 0.52 to 112.75.