Corn and grain markets started the week poorly

Corn futures resumed last week's decline in early Monday trading. Highly favorable growing conditions are boosting corn crop prospects here in the U.S., with forecasts implying more of the same through the first half of August. Other firms have apparently joined Doane in forecasting a fall crop even larger than implied by the USDA in July. September corn futures fell 7.5 cents to $4.685/bushel early Monday morning, while December slid 4.0 cents to $4.5975.

The soy complex also declined to start the week. The same weather boosting the production outlook and depressing corn prices is doing so for beans as well, although August weather will greatly affect harvest size. Still, Doane is forecasting a slightly smaller crop than did the USDA in July. Old crop tightness still seems to be supporting meal values. September soybean futures dropped 20.25 cents to $11.925/bushel in early Monday trading, while November beans dipped 9.5 cents to $11.72. September soyoil edged down 0.29 cent to 42.20 cents/pound, while September soymeal sagged $5.2 to $380.0/ton.

Wheat seemingly followed corn and beans lower Monday morning. News that Japan has resumed imports of U.S. white wheat after a spring scare about contamination with genetically modified seed has supported the wheat markets lately. However, beautiful Midwest weather and the prospect of huge corn and soybean crops are rather obviously weighing upon wheat prices as well. September CBOT wheat slipped 2.0 cents to $6.585/bushel in overnight action, while September KCBT wheat skidded 2.75 cent to $7.04, and September MGE futures lost 1.25 cents to $7.40.

Cattle futures were slightly lower last Friday. After trading at unchanged levels around $119 Thursday, cash prices firmed in follow-up trading around $120 on Friday. Choice beef prices rose again, but were largely unchanged for the week. They offer little evidence of an incipient seasonal rise. Until cash and wholesale prices sustain an advance, futures seem likely to struggle. Today is first notice day for August cattle futures. October cattle settled 0.02 cents lower at 124.47 cents/pound on Friday, while December declined 0.35 cents to 127.00. Feeder cattle futures were also lower. The September contract closed down 0.25 cents at 157.00 cents/pound and October sank 0.17 cents to 159.15.

Lean hog futures settled mixed on Friday. There was little news to move the market and trading was generally light. The cash index remains far above futures prices, which is helping to support the nearby contracts. Friday afternoon reports of cash weakness and wholesale strength seem likely to keep short-term trading confused. The October contract posted a gain of 0.05 cents and settled at $83.95 to end the week. December was down 0.10 cents, falling to $80.80.

Cotton futures continue trading in a very tight range. Prospects for a relatively good U.S. harvest are being offset by the fact that planting was quite limited this year, as well as the tightness of the old crop situation (aside from China's massive stockpile). It seems as if it will take some major supply or demand news to push the market in one direction or the other. October cotton future rose 0.14 cents to 85.46 cents/pound in early Monday trading, while December gained 0.26 cents to 85.24.


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