Corn futures closed lower on Monday, marking the third consecutive day of losses. The selling pressure seemed to stem from liquidation by the funds who added significantly to the long side in the previous reporting week. Weak export demand is also making traders anxious about holding positions through USDA’s supply and demand update on Tuesday. USDA is expected to boost ending stocks slightly based on a lower export projection for 2012/13. Weekly export inspections were poor again at only 7.9 million bushels. March corn settled 7 1/4 cents lower at $7.30. December 2013 was 1 cent lower at $6.36 3/4.
Soybean prices experienced a rather volatile trading session. Soybeans were steady during the overnight trade, but turned lower along with corn and wheat, trading as much as 14 to nearly 20 cents lower at midmorning. However, soybeans bounced back on strong export inspections at 46.6 million bushels. Argentina was mostly dry over the weekend, but periodic showers this week could further delay planting. However, showers in Brazil aided the crop there. USDA is expected to cut soybean ending stocks slightly with the Tuesdays monthly supply and demand update. January soybeans settled 2 1/2 cents lower at 14.74 3/4. The November 2013 contract was 5 1/2 cents higher 13.35. January meal was $1.90 higher at $444.90 and January soyoil closed 2 points higher at 51.15.
Wheat futures closed lower, but no lower than they were in midday trade. Pressuring futures today were ideas that tomorrow morning’s December WASDE update from USDA may very well cut the export forecast again due to a very disappointing pace of sales if USDA’s current forecast were to be met. Today’s weekly export inspections were below expectations. But losses were kept in check by forecasts calling for very cold temperatures in the Plains that could only add to mounting concern that the poorly established crop may not prove nearly as winter hardy as normal. There are growing reports of poorly rooted wheat already blowing out of the dusty soils in some areas. So wheat continues caught in a “crossfire” of sorts, between traders with reason to be bearish on old crop, but other traders with reason to be bullish on new crop. At the close, CBOT March was down 12 1/4 at $8.48 3/4; KCBT March was down 6 1/2 at $9.03 1/4 ; and MGE March down 7 at $9.27.
Friday weakness in cash cattle and wholesale beef prices weighed upon CME live cattle futures Monday morning; weekend news that Russian officials had deferred a threat to halt imports of U.S. beef and pork over potential contamination with the growth promotant ractopamine may have depressed CME values as well. However, a noon rise in choice beef values may have given rise to expectations for more of the same, especially with virtually all reports pointing to reduced cattle and beef supplies during winter and early spring. Such ideas are almost surely limiting the cattle market’s downside potential in the absence of a major surprise. Feeder cattle surged in response to sizeable corn losses. February live cattle futures ended the day 0.12 cents lower at 130.27 cents/pound, while the April future slipped 0.37 cents to 134.15 cents/pound.
After dropping sharply late last week, CME lean hog futures rebounded moderately Monday. Traders might believe the drop suffered last Thursday and Friday was overdone, especially if they expect the pork loin market to exhibit fresh strength through the balance of December. They may also think the modest rise in ham prices presages renewed pre-holiday demand and a fresh short-term advance. However, it seems more likely that the traditional pre-Christmas ham price breakdown is just getting underway, which in turn may exert additional downward pressure upon the hog and pork complex later this week. February hogs rose 0.45 cents to 83.92 cents/pound, while the June contract climbed just 0.20 to 98.30 cents/pound.