Corn futures closed 34 to 40 cents higher on Monday. Corn price hit record levels during trade today as drought conditions across the U.S. Corn Belt are anticipated to worsen. Front month contract (September) closed limit up as traders fear further reductions to crop condition ratings and corn yields are unavoidable. Today’s crop progress report is expected to be bullish for prices as the trade expects to see a 5 percentage point decline to corn’s good to excellent condition rating this afternoon.
Soybean futures closed 39 to 40 cents higher on Monday. Lack of significant rainfall and relief from excessively high temperatures across the drought stricken Midwest pushed soybean prices higher. Traders continue to eye weather conditions across the Midwest as the region experiences the worst drought in decades and as new crop soybeans are getting ready to enter their key production stage. USDA is set to release its crop progress report this afternoon; analysts are estimating a 5 percentage point decline to soybean good to excellent condition ratings.
Wheat futures closed 32 to 36 cents higher on Monday. The rally in the winter wheat market is not merely a “follow the leader” trend as corn price rise. Prices were buoyed by export sales of both hard red spring wheat (69,784 tonnes) and soft white wheat (37,430 tonnes) to Japan for 2012/13 delivery. News that Russian wheat production could decline to 45 million tonnes due to adverse weather added additional support to market prices. The USDA is set to release its crop progress report this afternoon; the trade is expecting to see further declines to spring wheat good/excellent ratings due to adverse weather conditions across the U.S. Plains.
Cattle futures closed 40 to 90 cents lower on Monday. Declining beef prices and sluggish cash trade were both factors that contributed to lower cattle futures. Midday boxed beef prices did show slight improvement, but overall prices are on the decline. The market saw additional pressure from rising grain prices and worsening drought conditions across the Corn Belt.
Lean hog futures closed mixed but mostly lower on Monday. Hog futures closed lower on waning beef demand and soaring corn prices. As the temperatures continue to rise, consumer demand for pork products dropped which contributed to lower futures prices. The market also felt pressure as grain prices soared to record highs, ultimately leading to higher costs of production for producers. The August contract managed to gain 3 cents while deferred contracts (October and December) were off 13 to 28 cents.