Ag markets proved generally mixed Monday morning

Grain traders are probably squaring positions Monday morning. The corn market has recently suffered badly from prospects for a huge U.S. harvest and from U.S. dollar strength. Today’s Export Inspections result also looked rather bearish. Nevertheless, futures rose modestly this morning, which probably reflected widespread short-covering ahead of tomorrow’s quarterly Grain Stocks report. December corn futures gained 1.5 cents to $3.245/bushel in Monday morning action, while May bounced 1.25 to $3.455.

The Export Inspections report seemingly encouraged soy complex bulls. Soybean and meal futures declined Sunday night, but rebounded from early lows this morning. The reason for the early bounce isn’t clear, but bullish traders were probably encouraged by strong result on the USDA Export Inspections report. Expect widespread position squaring prior to Tuesday’s stocks report. November soybean futures climbed 6.5 cents to $9.1675/bushel around midsession Monday, while October soyoil rallied 0.37 cents to 32.29 cents/pound, but October soymeal stalled at $307.2/ton.

Wheat futures turned mixed in early Monday trade. Farmers and buyers are almost surely squaring positions in the wheat markets, since Tuesday’s Small Grains Summary and Grain Stocks reports could have major implications for the outlook. News of a sizeable Taiwanese tender for U.S. wheat probably encouraged buying, but the KC and Minneapolis markets gave back early gains. December CBOT wheat ran up 3.25 cents to $4.775/bushel around midsession Monday, while December KC wheat sank 0.25 cent to $5.635/bushel, and December MWE wheat added 1.25 to $5.345.

Cash strength is supporting cattle futures. As we suspected, beef packers raised their cattle bids last Friday and paid $1 more (to $158/cwt) for a few Nebraska cattle late Friday afternoon. That news is almost surely powering the gains seen at the CME this morning. However, the lack of activity in the Southern Plains is probably limiting the bullish reaction. October live cattle futures jumped 1.30 cents to 159.75 cents/pound shortly before lunchtime Monday, while December futures surged 1.22 to 163.32. Meanwhile, October feeder futures leapt 1.07 cents/pound to 204.17 cents/pound and January soared 1.65 to 227.82.

Hog futures are rebounding from report-driven lows. Last Friday’s quarterly USDA Hogs & Pigs report held generally bearish implications beyond the short run, thereby sparking big losses on today’s opening. However, current firmness seems to be persuading traders that the outlook is better than suggested by the supply data. October hogs bounced 0.27 cents to 106.80 cents/pound late Monday morning, while December had declined 0.60 to 93.87.