CORN on the Chicago Board of Trade (CBOT) closed mostly lower on Monday with one 2008 deferred up. The MAY’07 contract finished at $3.580/bu, off 6.2¢/bu but 5.8¢/bu higher than last week at this time. The DEC’07 contract finished at $3.644/bu, off 3.0¢/bu and also lower than last Friday’s close by 4.0¢/bu. DEC’08 futures finished even again with last Friday at $3.796/bu but 4.8¢/bu lower than last Monday. The JULY’08 contract was the only one gaining slightly. Weather was seen as the driver for lower prices with warm, dry forecasts for the next week expected to give a quick boost in corn planting progress. Traders during the day expected USDA to show U.S. corn plantings at 30-35%, up nicely from last week’s 11%. However, the USDA report out at 4:00 p.m. EST shows corn plantings at 23%. Tomorrow and the next few days will be interesting. US farmers were expected to plant around 90.5 million acres of corn this year and they better get busy with a little help from the weather or otherwise corn will soar in light of fresh ethanol demand this week. Deliveries of corn this week are expected to be somewhat heavy. Deliveries on the May contract totaled 1,723 lots on Monday, 723 lots above estimates. In other news, South American weather has been less than ideal for corn harvest but serious problems have not been reported … yet. Argentine farmers made some progress last week in their corn harvest despite continued wet weather. U.S. corn exports weren’t noteworthy last weekend. Cash corn in the Midwest was mostly steady. The CFTC’s Commitment of Traders report for futures and options combined had large speculators in long positions at 252,111 contracts, up 4,474 lots from last week. Large specs. in short positions were placed at 73,762 contracts, up 1,724 lots. Long funds were down 1,350 lots at 359,509 contracts while funds in short positions were down 109 contracts at 13,198 lots. Cash sellers should have considered being priced up to 40%-50% of next year’s production on previous advice. You might consider pricing another 5% or so in the next few days as this market may rally on short crop-planting news. Hedgers may consider staying out off the market for the next few days.

SOYBEAN futures on the Chicago Board of Trade (CBOT) showed strength on Monday with the MAY’07 contract closing at $7.430/bu up 4.4¢/bu and $5.0¢/bu higher than last Monday. NOV’07 futures closed up 4.2¢/bu at $7.706/bu regaining 5.0¢/bu from last Monday but still lower than two weeks ago by 11.8¢/bu. Soybeans found support in the unwinding of bullish corn and bearish soybean spreads. As traders expected more corn planting progress than USDA published, beans were traded up and corn down amid expectations for more corn getting planted. However, USDA’s lower progress report will most likely prove bearish on beans over the next few days at least. USDA placed the US soybean crop at 3% planted, up from 2% last week. USDA reported higher-than-expected weekly export inspections for US soybeans as they remain competitive with South American beans. USDA reported 14.935 million bu of soybeans inspected for export for the week ended April 26. This was slightly higher than the 8-14 million expected. Year-to-date soybean inspections were placed at 925.610 million bu, up 23% from 752.343 million bu at this time last year. Cash soybean bids were steady to firm on Monday amid slow farmer sales. Support was found in the CFTC Commitment of Traders report data showing index funds slashing net long positions in CBOT soybeans to 32,825 lots, off 15,000 contracts for the week ended April 24. If you have not priced up to 60% of the 2007 crop by now you may wish to consider pricing some now on this rally. If corn plantings remain subdued, soybean prices may be expected to fall.

WHEAT futures in Chicago (CBOT) closed lower on Monday. The MAY’07 contract closed at $4.854/bu, off 15.0¢/bu from Friday and 8.6¢/bu lower than last week at this time. JULY’07 wheat futures
was the most active contract finishing off 17.0¢/bu at $4.954/bu and 10.0¢/bu lower than last Monday’s close. Profit taking was noted. Drought fears were slacking off for the world crop amid nice Australian
rains late last week and forecasts for more showers in important European wheat growing areas. As expected, USDA reported improved wheat conditions late in the day. The US wheat crop condition
improved 2 points in the good-to-excellent rating from 54% to 56%. The Wheat Quality Council’s Kansas wheat tour begins on Tuesday with yield and production forecasts expected on Thursday. USDA placed US wheat inspected for export late last week at 16.7 million bu, well within estimates. Large speculators in short positions in CBOT wheat pared positions to 6,619 lots, down 6,000 contracts for the
week ended April 24. Producers who have priced between 60%-80% of the ‘07 crop are in good shape. It was advised last week to consider pricing to that level if it hadn’t been done. There may not be many more opportunities to price wheat at these levels as we approach harvest.

LIVE CATTLE on the Chicago Mercantile Exchange (CME) finished well on Monday on further weakness in corn. The APR’07LC contract closed at noon at $97.275/cwt, up $.075/cwt but $0.080/cwt
lower than last week at this time. The JUNE’07LC closed at $94.125/cwt up $0.850/cwt on the day and $0.975/cwt higher than last Monday. The AUG’07LC contract closed at $92.600/cwt, up $0.575/cwt. Both these weeks posted highs not seen in over two weeks. Fund buying and short covering provided much of the support amid strong technical signals and expectations for higher cash cattle prices this coming week. Traders were also mildly exuberant of a resumption of exports to South Korea last week. South Korea, at one the time the third largest US beef importer allowed its first shipment of 6.4 tonnes of US beef into the country since December 2003. Good grilling weather provided other support amid thoughts of retail beef clearing the market. USDA, however, put the choice beef cutout at $157.63/cwt, off $0.13/cwt. Packer supplies are running somewhat thin at the moment and are expected to bid up cattle in the coming week, even though margins for them are still in the red. According to HedgersEdge.com, the average beef plant margin for Monday was a negative $7.05/head, up from a negative $11.95/head last Friday but down from a positive $2.60/head a week ago. Cash sellers are strongly encouraged to push sales this week on lower corn futures. It might be wise to price a little corn this week, especially if corn seedings continue to be slow.

FEEDER CATTLE at the CME finished up on Monday. The MAY’07 contract closed at $109.550/cwt, up $1.000/cwt and up $0.575/cwt from last Monday. The AUG’07 contract was the most active closing at $112.850, up $1.375/cwt. Lower corn futures and higher fat cattle prices were supportive. It is noteworthy to see that the September through November 2007 contracts all posted fresh highs amid good strength in the cash feeder markets. The CME Feeder Cattle Index for April 26 was up $0.07/cwt at $106.850 on Monday. Cash sellers should keep feeder cattle sales current. It might be a good idea to price some corn now as it has now been two weeks in a row that corn plantings have not been what traders thought they should be. Sooner or later this market is going to wise up and corn will begin to go
up.

LEAN HOGS on the CME closed up on Monday. MAY’07LH futures closed at $75.600/cwt, up $1.150/cwt but $1.05/cwt lower than last Monday’s close. The JUNE’07LH contract was placed at
$75.100/cwt, up $0.525/cwt while the JULY’07 contract finished at $75.350/cwt, up $0.45/cwt. Lean hogs found support as funds bought into long positions and firmer cash markets. There was little fear that any consumers were going to get sick over eating hogs that may have eaten tainted feed. USDA stated Monday that it had found no evidence of harm to human health from contaminated feed based on several factors, including content dilution, in the actual hog to human food chain. The premium of futures to cash showed traders somewhat fearful last week over this issue but that seems to have dissipated. The CME Lean Hog Index for Monday was up $0.43/cwt at $70.79/cwt. Hogs are now in a seasonal trend to track higher and packer bids are reflecting this fresh demand amid tight cash supplies. USDA lowered the pork carcass cutout on Friday placing it at $75.89/cwt, down $0.07/cwt. The recent advances in product values helped keep packer margins in the black in spite of paying through the nose for supplies. The average pork plant margin for Monday, according to HedgersEdge.com, was $5.65/head, down $0.75/head from Friday and down from $1.20/head a week ago. Cash sellers should continue to try to push weight limits not being in a hurry to sell hogs off the finishing floors. Hog feeders should think about pricing more grain inputs at this time.

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