CORN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The MAR’11 contract closed at $6.956; off 10.75¢/bu but 21.0¢/bu higher than last week at this time. The DEC’11 contract closed at $6.074; down 10.75¢/bu but 5.5¢/bu over last report. Corn futures supported by a bearish forecast were pressured by profit taking after reaching highs not seen since July 2008. Funds sold over 10,000 lots. Several sources on the floor said it was too early to think this was a true reaction to any forecasts. USDA on Monday said U.S. farmers intend to plant 92.0 mi acres in 2011; up 4.2 mi acres from 2010 and raising the anticipated U.S. corn crop to 13.755 bi bu from the 2010 crop of 12.477 bi bu. Exports were not supportive with USDA putting corn-inspected-for-export at 26.149 mi bu vs. expectations for 28-30 mi bu. Exporters sold 145,000 tonnes (5.71 mi bu) of U.S. corn for 2011 delivery. Indonesia announced it may need 2 mi tonnes (78.7 mi bu) of corn. Good corn-crop weather in Argentina and Brazil has raised the corn crop rating in both countries to satisfactory condition. Cash corn basis was steady-to-firm amid slow farmer selling. Fundamentally, long-term supplies will remain tight with Mexico recently reporting heavy freeze damage to its crop and booking more purchases of U.S. corn on Monday. USDA said merchandisers have sold 355,000 tonnes (13.98 mi bu) in recent days. Mexico’s Agriculture Ministry stated they expect imports to rise 50% for 2011-12. The head of the National Association of Farm Trading Businesses said today that Mexico is experiencing the worst food disaster in 80 years. Floor sources are wary of signs for slowing U.S. exports amid these high prices. Another demand factor is record-high ethanol production draining corn supplies.
SOYBEAN futures on the Chicago Board of Trade (CBOT) finished lower on Monday. The MAR’11 contract closed at $14.026/bu; down 13.25¢/bu and 28.75¢/bu lower than last report. NOV’11 soybean futures closed off 14.0¢/bu at $13.654/bu and 0.75¢/bu lower than last Monday at this time. Prices were weighed down by profit-taking, long liquidation of bull spreads, prospects for good crop weather, and a bearish acreage forecast. USDA put soybeans-inspected-for-export at 33.823 mi bu vs. expectations for 30-35 mi bu. Funds sold over 6,000 lots. As with corn, floor sources said it was too early to react to an acreage forecast. On Monday USDA put 2011 U.S. soybean planting intentions at 78.0 mi acres, up 0.6 mi acres from the 77.4 planted in 2010. The increased planting expectations are expected to produce a 3.355 bi bu crop vs. the 3.329 bi bu crop produced in 2010. Reports out today said 9% of Brazil’s estimated record 69.8 mi tonne (2.56 bi bu) crop had been harvested as of Feb. 11. The Argentinean crop is in good shape. Cash soybean basis was steady-to-firm. Fundamentally the absence of South American production threats and signals from China that import demand will shift to South America from expensive U.S. soybeans pressured futures. Technically the market was overbought.
LEAN HOGS on the CME finished mixed on Monday. The FEB’11LH contract closed down $0.725/cwt at $85.675/cwt but $1.865/cwt higher than last week at this time. The APR’11LH contract closed at $92.450/cwt; up $0.075/cwt and $0.625/cwt over last report. AUG’11LH futures closed at $100.775/cwt; down $0.050/cwt but $2.275/cwt higher than last week at this time. The February contract expired on Monday and held near cash. Cash hogs on Monday traded $2/cwt lower to dealers after processors overfilled lines late last week. However, losses in futures were limited due to strong meat demand, especially in the export market. USDA put pork exports for 2010 up 3% over the previous year. Open interest was down 1,223 contracts at 246,960 lots. Some spreaders were noted exiting short positions in April which supported front month prices. USDA on Friday put the pork cutout at $88.31/cwt; down $0.64/cwt and $0.86/cwt lower than last report. According to HedgersEdge.com, the average packer margin was lowered $5.10/hd to a positive $3.85/hd based on the average buy of $62.07/cwt vs. the average breakeven of $63.47/cwt. The latest CME lean hog index was placed at 85.48¢/lb; up 0.95¢/lb and 3.73¢/lb over last report.
WHEAT futures in Chicago (CBOT) closed up again on Monday. The MAR’11 wheat contract closed at $8.720/bu; up 5.0¢/bu and 13.5¢/bu over last report. JULY’11 futures finished up 5.5¢/bu at $9.310/bu and 14.5¢/bu higher than this time last week. Wheat was supported by export demand, weather concerns for the crops in both the U.S. and China, and fund buying. Export demand was firm with USDA putting wheat-inspected-for-export at 24.196 mi bu vs. expectations for 20-23 mi bu. Iraq bought 350,000 tonnes (12.9 mi bu) of U.S. wheat; Tunisia bought 100,000 tonnes (3.7 mi bu) of U.S. wheat; Egypt’s wheat imports are returning to normal; and Australia is on track to sell a record volume of wheat to China. USDA said U.S. farmers intend to plant 57.0 mi acres of wheat in 2011, up from 53.6 mi acres planted in 2010. There is some concern that warmer U.S. weather will melt the protective snow cover, add limited amounts of soil moisture, and leave the crop vulnerable to freeze damage from any future cold snap. Wheat bids in the U.S. Plains were steady on Monday amid slow farmer selling. Fundamentally the largest bullish factor for global wheat is that China could import as much as 4 mi tonnes (147.0 mi bu) if drought beginning there is as bad as crop experts fear.