LEAN HOGS on the CME closed down again on Monday. The OCT’07LH contract closed at $57.675/cwt, down $0.550/cwt. DEC’07LH futures closed down $0.825/cwt at $59.475/cwt, and nearly even with a week ago. October was pushed lower by an abundance of hogs causing concerns for lower cash hogs later this week and a lower Lean Hog Index. USDA estimated hog slaughter to be at 2.321 million head last week. This would be a record. The latest CME Lean Hog Index was down $0.36/cwt at $58.05/cwt. October/December and February/December spreading was the game of the day. USDA put the lean hog cutout value at $60.35/cwt, down $0.35/cwt. Rumors that Mexico might be in the market for hams this week was seen as supportive. According to HedgersEdge.com, the average pork plant margin for Monday was estimated at $5.55/head, down $0.55/head from Friday but $0.35/head better than a week ago. Cash sellers should continue to push hog sales this week while holding off ear-term corn pricing.

CORN on the Chicago Board of Trade (CBOT) closed off on Monday amid increasing harvest pressure and expectations for even bigger numbers in the USDA World Agricultural Supple Demand Estimate report due out this Friday. The DEC’07 contract was the most actively traded, finishing at $3.396/bu, off 2.4¢/bu and 7% and 29.0¢/bu lower than last Monday. The December contract traded below all key moving averages with first resistance at $3.512/bu and the 9-day Relative Strength Index (RSI) at 35.76. MAR’08 futures also finished off 2.6¢/bu at $3.562/bu and 29.2¢/bu lower than a week ago. The DEC’08 contract finished at $3.91/bu, 2.4¢/bu lower than last Friday. Pressure from a limit-down drop in wheat and sliding soybeans took corn down. A firmer U.S. dollar and a looming record corn crop didn’t help either. China left its 2007 corn crop estimate unchanged from last month at 149 million tonnes (5.7 billion bu). Israel announced a tender for U.S. corn of up to 56,000 tonnes (2.2 million bu). Cash corn in the U.S. Midwest was mostly steady while cash corn in the U.S. Mid-Atlantic States was weaker with opening bids ranging from 2.0¢/bu – 3.0¢/bu lower in many places. Producers are taking their time about selling due to the recent decline in prices. Funds sold about 4,000 lots to stop the bleeding. The CFTC’s Commitment of Traders report for the week ended October 2 showed large speculators cutting bullish positions in CBOT corn by 14,000 contracts to 132,278 lots. Producers having sold 60%-70% of this year’s crop are in good shape.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were down a range of 11.0¢/bu – 23.0¢/bu on Monday. NOV’07 futures closed at $9.254/bu, down 15.0¢/bu from Friday and 66.0¢/bu (6.6%) lower than this time last week. The JAN’08 contract finished below $10.00/bu; dipping to $9.420/bu, off 15.0¢/bu and 67.4¢/bu lower than last Monday. NOV’08 soybean futures ended at $9.162/bu, down 20.6¢/bu and 51.8¢/bu lower than a week ago. Limit down wheat and weak corn put the pressure on. Much needed (but not adequate) rains in Brazil, a stronger U.S. dollar, and building harvest pressure didn’t help any. Cash soybeans in the U.S. Midwest on Monday were mixed to weaker while soybeans in the U.S. Mid-Atlantic States were 13.0¢/bu – 20.0¢/bu lower. Funds sold about 5,000 contracts while the CFTC Commitment of Traders report had large speculators shrinking bullish positions in CBOT soybeans by 6,000 lots to 107,234 contracts as of October 2, 2007. The November ’07 contract stayed above its 50- day moving average of $9.035/bu. The 14-day RSI for NOV’07 futures finished at 49.59. Hopefully you considered pricing what was left of the ’07 crop to price last week. It would be wise to get 25% of the 2008 crop priced at this time.

WHEAT futures in Chicago (CBOT) closed limit down in the nearbys on Monday. DEC’07 wheat futures settled 30.0¢/bu lower at $8.600/bu taking almost 10% of the market, or 92.4¢/bu from last Monday. The JULY’08 contract closed at $6.572/bu, off 29.2¢/bu and 36.8¢/bu lower than a week ago. The bulls got out of unprofitable positions on sell stops amid bear profit taking after recent all-time highs. Rain in Australia and a stronger U.S. dollar helped fuel the selloff. European wheat markets tumbled overnight to lead the way. Additionally, rain in the U.S. Midwest was noted as helping newly seeded hard red winter wheat for the ’08 crop. South Korea provided some support tendering an offer for 25,300 tonnes (930,000 bu) of U.S. wheat. The CFTC Commitment of Traders report showed large speculators moving to net short positions in CBOT wheat at 4,398 contracts, off 5,092 lots. Funds sold 4,000 lots while trying to sell off 21,000 lots at the end trading. Cash wheat in the Mid-Atlantic States fell a range of 12.0¢/bu -20.0¢/bu on Monday. Producers should have sold all wheat stocks by now and might consider holding off pricing more of the ’08 crop.