Ag markets are beginning this week firmly

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Corn futures began the week on a firm note. Although the record U.S. harvest implies plentiful supplies for the foreseeable future, corn prices have posted a general rise lately. It seems likely that traders have decided that the harvest lows are in and have been covering short positions. However, price movements could stall ahead of tomorrow’s monthly USDA reports. March corn futures rose 2.0 cents to $4.3625/bushel Sunday night and May gained 1.75 to $4.445.

Technical factors seemingly boosted soy complex in early-week trading. Although recent rains have reportedly improved production prospects for the major South American producers and undercut CBOT soy prices as a consequence, they rose moderately Sunday night. Robust global demand may be supporting prices, but the fact that bears couldn’t force the most-active March future below its 10-day moving average probably attracted technical buying. Palm weakness undercut soyoil. January soybeans rallied 8.0 cents to $13.335/bushel early Monday morning, while January soyoil sagged 0.17 cents to 40.32 cents/pound, and January soymeal added $5.5 to $432.9/ton.

Concern about winter damage is supporting the wheat markets. Wheat futures retested their fall lows last week, but are beginning this week more firmly. Traders apparently worry that last week’s snows left significant areas uncovered and vulnerable freeze damage from the ongoing cold wave. March CBOT wheat futures advanced 1.0 cent to $6.52/bushel around dawn Monday, and March KCBT wheat futures edged up 1.25 cents to $6.9675, while March MWE futures were steady at $6.81.

Cattle futures seemingly benefitted from short covering last Friday. After suffering an unexpected breakdown Thursday, cattle futures stabilized Friday. The strength of current demand remains a concern, but the potential for supply shortages this winter apparently spurred late-week short-covering. February cattle futures closed just 0.05 cents lower at 132.85 cents/pound Friday afternoon, while the April contract lost 0.05 to 133.70. Meanwhile, January feeder cattle rose 0.35 cents to 164.47 cents/pound, while March feeders gained 0.25 to 164.67.

Hog futures made a Friday afternoon comeback to end last week. Last week’s decline in direct market prices continued Thursday, thereby weighing rather heavily upon CME futures. However, cash and wholesale values rallied Friday afternoon, with boosted CME prices at the close. The relatively small weekly kill probably encouraged bulls. February hog futures bounced 0.32 cents at 89.00 cents/pound last Friday afternoon, while June moved up 0.20 to 99.70.

After rallying strongly last Friday, cotton futures slipped Sunday night. A bout of long-liquidation would seem very understandable to start this week after last Friday’s surge, especially with the U.S. market apparently being rather well supplied at this point. News that Chinese purchases for the massive domestic stockpiling program had declined significantly from last year may also have sparked selling. March cotton futures skidded 0.09 cents to 80.32 cents/pound to start this week, while July cotton dipped 0.30 cents to 80.23.

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