Corn futures seemed caught between the soybean and wheat markets to start the new week. The same South American dryness that has been boosting soybean prices seemingly supported the yellow grain as well. Conversely, ideas that snow and rain crossing the U.S. winter wheat fields today will also improve the moisture situation over the Corn Belt may have dragged corn prices lower. March corn had slipped 0.50 cent to $6.8975/bushel early Monday morning; December dipped 0.50 cent to $5.5225.

After apparently suffering from a major round of bullish profit-taking last Friday, soybean futures seem set to begin this week rather strongly. We suspect the reasons for the early rise are the same as those discussed last week, with optimism about Chinese demand and pessimism about Argentine production prospects powering the advance. However, the sharpness of the late-week reversal raises doubts about bullish ability to sustain further short-term gains. March beans rose 5.50 cents to $14.6675 in overnight trading, while March soyoil dropped 0.31 cents to 50.04 cents/pound and March meal surged $4.5 to $431.4/ton.

Wheat futures seemed to be reacting to the second winter storm to hit the Southern Plains in the past week, as well as the prospect for more precipitation in early March. As grain market observers are almost surely aware, concerns about the productive potential of the U.S. winter wheat crop has be greatly elevated due to persistent dryness over much of the Central U.S. this winter. These latest storms will very likely alleviate the situation significantly. March CBOT wheat futures sank 4.75 cents to $7.1025/bushel Sunday night, while March KCBT wheat lost 3.5 cents to $7.4625, and March MGE futures slid 0.25 cents to $8.025.

Cattle and feeder futures rallied last Friday in apparent response to news of strong Japanese buying the week prior. The monthly USDA Cattle on Feed report released after the close largely met expectations, the data may not cause a significant reaction today. On the other hand, talk of blizzard conditions hitting the Southern Plains this morning might boost cattle prices, since such icy weather can greatly diminish the performance of feedlot cattle and reduce market-ready supplies. April cattle climbed 0.40 cents to 128.40 cents/pound last Friday, while August gained 0.20 cents to 125.35. Meanwhile, March feeder cattle advanced 0.55 cents to 141.25 cents/pound, and August surged 0.80 cents to 154.27.

Hog futures fell substantially to end last week on a very poor note. The ongoing decline almost surely reflects pessimism about short-term demand strength, particularly after cash markets fell once again Friday. Moreover, the low weekly slaughter total seemingly represented reduced demand from pork packers rather than a shortage of market-ready animals. The monthly Cold Storage report released after the close may have little impact upon the mid-morning opening, since the most closely watched numbers were well anticipated. April hogs closed 0.72 cents lower, at 81.65 cents/pound late Friday afternoon, while June fell 0.75 cents to 90.95.

Cotton futures continued their late-week setback to start this week. The drop probably reflected reports of plentiful rainfall over the Southeastern U.S. over the weekend. The fact that the market seemed to respond poorly to a report stating January cotton imports into China 40% over the comparable year-ago rate seems a rather bearish development as well. March cotton skidded 0.44 cents to 80.95 cents/pound in Sunday night-Monday morning trading, while December dove 0.94 cents to 82.70.