By: NATHAN STUEDLE
GRAINS:
May corn closed up 3 1/4 cents and July corn was up 2 3/4 cents. May soybeans closed down 1 1/2 cents and July soybeans were down 1 1/4 cents. May KC wheat closed down 1 3/4 cents, May Chicago wheat was up 5 3/4 cents, May Minneapolis wheat was up 2 cents.
Last week's trade ended with a risk-off attitude after Iran declared the Strait of Hormuz to be open to commercial traffic on Friday morning. That decision was quickly reversed, with Iran stating Sunday that the Strait was closed amid the ongoing U.S. blockade (which culminated Sunday in the seizure of an Iranian vessel). Crude oil and other energy markets moved higher Monday with eyes now on upcoming negotiations scheduled in Pakistan with the two-week ceasefire set to expire on Tuesday. It is unclear if Iran has agreed to participate in any talks. In ag markets, the energy influence was felt in higher corn, soybean oil, and canola futures. Meanwhile, escalation continues to be seen as bearish to soybean futures. Wheat futures were mostly higher Monday, though Kansas City futures turned lower by the close without much explanation. Bullish influence in the wheat market stems from growing concern for the production potential for U.S. hard red crop amid challenging conditions.
LIVESTOCK:
The live cattle complex was enjoying a modest rally at the week's start as traders felt the market endured enough immediate downward pressure late last week and they were also pleased with last Friday's Cattle on Feed report. The market was unable to scale higher following last week's slight correction -- as really that decision is going to be based on whether fundamental support arises (especially from the cash market). Last week Northern dressed cattle traded at $385 to $392, but mostly at $388 which is steady to $1.00 lower than the previous week's weighted average and Southern live cattle traded at mostly $248 which is generally steady with the previous week's weighted average.
The feeder cattle contracts were trading mostly higher throughout the morning, but as the noon hour came and went, so did the positive momentum. The market saw most of its nearby contracts change directions and trade lower. More than anything it's likely traders yearn to see greater fundamental support before they advance the contracts much more.
The lean hog contracts were mixed headed into Monday's closing bell, as the nearby contracts were slightly higher while the deferred months scaled lower. Thankfully some of the upward movement in the nearby contracts likely stems from traders recognizing the fundamental support from consumers which has trended higher over the last several trading days.