Ag markets seem set to start this week on a downbeat

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Early Monday the grain complex traded according to old and new crop conditions in a pattern similar to that seen last week. That is, nearby corn futures rose slightly on old-crop supply tightness, whereas forecasts for improving weather conditions depressed new crop values. Resurgent equity index futures may also have boosted the July corn contract. July futures edged 0.25 cent higher to $6.5525/bushel early Monday morning, while December fell 4.0 cents to $5.29.

Soybean futures moved lower to start trading this week, with firm soyoil prices mitigating the downward action. Anticipation of improved conditions that will allow a quick finish to U.S. soybean plantings apparently weighed upon soybean and meal prices, whereas palm oil gains reportedly boosted soybean oil values. Talk that bullish traders are heavily committed to the long side may also have undermined soybean futures. July soybean futures fell 9.5 cents to $15.07/bushel in Sunday night trading, while July soyoil climbed 0.30 cents to 48.78 cents/pound, and July soybean meal slipped $1.3 to $449.4/ton.

Improved new crop prospects apparently depressed wheat futures over the weekend as well. Fine weather certainly seems likely to accelerate spring wheat plantings. Moreover, early reports from the Texas harvest suggest the U.S. winter wheat crop will exceed early forecasts. July CBOT wheat futures declined 3.0 cents to $6.7775/bushel in early Monday morning action, while July KCBT wheat slid 1.0 cent to $7.105, and July MGE futures dropped 2.75 cents to $8.0125.

Seasonal pressure continued weighing upon the cattle and beef complex last Friday. Indeed, late-week wholesale losses reinforced ideas that the late-spring cash decline will persist into early summer. Wire service reports indicated that a few Southern Plains animals changed hands about $2 below last week, at $120/cwt (cents/pound) just before the CME close. Futures seem likely to continue struggling until traders see signs of cash strength. August cattle settled 0.75 cents to 118.32 cents/pound to end last week, while December lost 0.85 cents to 124.57. August feeder cattle futures tumbled 2.07 cents to 143.40 cents/pound, and November dove 1.42 cents to 149.80.

The June hog contract expired on a very strong note at noon last Friday. However, the persistent weakness suffered by the cattle and beef complex, as well as the historical tendency for hog and pork prices to turn downward from an annual peak in mid-to-late June apparently weighed upon the deferred contracts. However, any signs of cash and/or pork strength could boost futures during the days ahead. The July hog future declined 0.62 cents to 98.02 cents/pound at its Friday settlement, whereas December actually closed 0.05 cents higher, at 81.65.



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