LEAN HOGS on the CME closed mostly higher on Monday with the exception of the two nearby contracts. The APR’07LH contract closed at $64.375/cwt, off $0.025/cwt and $3.575/cwt lower than this time last week. The JUNE’07LH contract closed at $74.625/cwt, up $0.050/cwt from Friday but $2.850/cwt lower than last Monday’s close. Expectations that cash pork prices will decline this week weighed on the market. USDA put the pork carcass cutout on Friday at $65.49/cwt, off $0.48/cwt. This is the lowest since February 2, 2007. The CME reported the latest lean hog index at $62.62/cwt, down $0.05/cwt. According to HedgersEdge.com, the average pork plant margin for Monday was estimated at $6.60/head, off $1.15/head from last Friday and off $5.50/head from one week ago. Packer margins are seen as slipping but holding onto the black for now. Cash sellers should try to sell hogs at the right weights while pushing them off the finishing floors as soon as they are ready. Hog feeders should be ready to price more feed inputs within the next few days looking for a further break about Wednesday.

CORN on the Chicago Board of Trade (CBOT) closed mostly up on Monday with the exception of them two nearby contracts. The MAY’07 contract finished at $3.98/bu, off 1.4¢/bu. The DEC’07 contract finished at $4.060/bu, up 3.0¢/bu and 3.4¢/bu higher than last Monday’s close. DEC’08 futures finished up 8.2¢/bu at $3.934/bu and 7.0¢/bu higher than this time last week. The market lacked follow-through support from last Friday. Unwinding bear spreads pressured the May contract amid prospects for wet weather in the corn belt seen as slowing corn seedings. Trade volume was lack luster. USDA put weekly export inspections for U.S. corn at 40.8 million bu, just over expectations of between 35-40 million bu. The Argentina corn harvest is almost 12% complete now but rains there are slowing harvest progress. I will be in Argentina next week and will try and give somewhat of a different report than usually appears in this column then. In other export news, South Korea and Japan are seen as wanting to buy corn for June and July shipments with Japan expected to seek the smaller amount. Cash corn in the Midwest early on Monday was slow. Mid-Atlantic corn bids were bumped early Monday trying to entice more cash corn to come in to elevators. Friday’s CFTC Commitment of Traders report had large speculators slashing net long positions in corn by about 30,000 contracts to 240,629 lots. Index funds trimmed net long positions to 361,044 contracts. News of President Bush’s announced commitment to trade more ethanol with South America has the corn markets jittery. If trade barriers are lifted and processor incentives lowered, corn may lose some of its luster in the coming days. Crude oil futures slid over the weekend. If this continues corn priced last week and the week before will look really good. Hedgers on short positions in DEC’07 corn in the $3.90/bu range should be smiling. This market still shows signs of losing steam, at least through late March and early April, on declining crude prices, increasing crop acres, and now shaky ethanol support from the U.S. government. Cash sellers should consider pricing up to 40% of next year’s production at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. The MAY’07 contract finished at $7.594/bu, up 6.0¢/bu. NOV’07 futures also closed up 9.4¢/bu at $8.030/bu and 22.6¢/bu higher than a week ago. The vernacular statement circulating soybeans is that, “soybeans are trying to buy acres from corn ahead of the USDA March 30 report.” USDA placed weekly export inspections at a lack-luster 21.2 million bu, on the low end of trade expectations of 20-25 million bu. South Korea was noted as making it known it wanted beans earlier than usual because it expects U.S. soybeans to cost more. Rain is slowing field prep in the U.S., as well as harvest in Brazil. Brazil’s harvest was placed at 42% of the crop as of March 16, compared to 31% the week before. Yield reports from Argentina are showing high yields there despite harvest delays due to rain. Cash soybeans were mostly steady in the U.S. Midwest and firm to higher in the Mid-Atlantic on Monday. The CFTC Commitment of Traders report for Friday had large speculators growing net long positions to 64,114 contracts s as of March 13. Similarly, index funds grew net long positions to 135,695 lots. Producers should consider having at least 60% of the 2007 crop priced. These prices should hold or get a little better prior to March 30.

WHEAT futures in Chicago (CBOT) were off on Monday with the MAY’07 contract closing at $4.550/bu, off 5.6¢/bu and 5.0¢/bu lower than this time last week. JULY’07 wheat futures finished down 4.0¢/bu at $4.700/bu and 13.2¢/bu lower than last Monday. Trading volume was thin on the day and pressured by long liquidation in the corn market. USDA reported disappointing export numbers at 13.5 million bu, below trade estimates for 15-20 million bu. Good wheat weather in the U.S. Plains weighed on prices. Cash bids for Mid-Atlantic State sellers were firm to higher on Monday. The CFTC Commitment of Traders report for last Friday showed large speculators widening net short positions in CBOT wheat to 13,335 contracts for March 13. Index funds cut net long positions to 192,701 lots. Producers should now consider pricing between 60%-80% of the ‘07 crop. Hedgers should consider short positions in the JULY/07 contract near $4.605/bu to get orders filled.