Financial and weather news depressed most commodities Monday

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Corn futures reacted weakly to bearish developments Monday morning. Sizeable equity market losses and U.S. dollar strength apparently undercut several commodity sectors in early trading, with grain and soy prices being no exception. Talk of improving crop conditions and favorable weather forecasts also appeared to trigger widespread selling. July corn futures sank 8.0 cents to $6.5375/bushel by late Monday morning, while December lost 9.0 cents to $5.4725.

The soy complex was rather mixed late Monday morning. The legume markets had declined in concert with corn and wheat Sunday night, but the tight soymeal situation may have offset the bearish downdraft. It is safe to assume financial market weakness, dollar strength and improving crop conditions weighed upon the new crop markets, but old crop beans and meal clearly stabilized. July soybean futures climbed 5.75 cents to $14.99/bushel just before lunchtime Monday morning, while July soyoil dropped 0.54 cents to 47.48 cents/pound; in contrast, July soymeal rallied $1.5 to $449.2/ton.

Harvest results reportedly depressed wheat futures Monday morning. Early reports indicated that winter wheat harvesting over the weekend yielded surprisingly good results, which exerted considerable downward pressure upon the Chicago and Kansas City markets. Declining equity values, the rising dollar and forecasts for favorable weather over spring wheat fields in the northern Plains apparently weighed upon the Minneapolis market. July CBOT wheat plunged 18.5 cents to $6.795/bushel around midsession Monday, and July KCBT wheat dove 16.25 cent to $7.2025, while July MGE futures sagged 2.5 cents to $8.115.

Cattle futures started the week on a down beat. The bearish nature of the monthly USDA Cattle on Feed report last Friday probably weighed upon prices. In addition, traders seemingly turned rather optimistic about short-term cash prospects last Friday, but late afternoon news indicating steady-lower country prices probably sparked widespread long liquidation. August cattle sagged 0.02 cents to 121.57 cents/pound just before midday Monday, while December dropped 0.05 cents to 127.05. Meanwhile, diving corn futures boosted feeder prices. The August yearling contract surged 1.05 cents to 147.97 cents/pound and November rose 1.05 to 153.05.

Hog futures exhibited considerable strength Monday morning. Although the cash and wholesale markets have a history of turning decisively lower from June highs, the discounts already built into summer futures may have given them room to rally over the short-term bounce. The large rise in pork cutout last Friday also seemed quite supportive. July hog futures surged 1.42 cents to 101.17 cents/pound around midsession Monday, and the December contract added 0.22 cents to 82.52.



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