Ag markets diverged significantly at Friday's close

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Talk of strong demand limited seasonal pressure on corn futures Friday. Seasonal pressure from the record U.S. harvest and technical resistance kept corn futures underwater Friday morning. However, talk of vigorous demand and strength spilling over from the soy and wheat markets apparently limited corn losses. December corn futures closed down 0.75 cent at $4.2225/bushel Friday afternoon, while May slid 0.25 to $4.3525.

Soybeans and meal proved quite strong in week-ending action. Chinese officials revised their estimates of November soybean imports upward by about 200,000 tonnes early Friday morning. That news seemingly reemphasized the sheer size of previously established U.S. export commitments and powered CBOT soybean and meal gains. In contrast, slumping palm prices dragged soyoil futures lower. January soybean futures jumped 28.0 cents to $13.195/bushel in late Friday trading, while December soyoil declined 0.38 cents to 41.16 cents/pound, and December soymeal surged $16.8 to $427.8/ton.

Talk of export demand and Australian problems boosted the wheat markets. Western Australian wheat fields are being blessed with excessive rainfall, whereas fields on its east coast have reportedly suffered significant frost damage lately. Meanwhile, recent reports have rebooted optimism about export demand for U.S. grain. December CBOT wheat futures gained 0.75 cent to $6.495/bushel at Friday’s close, while December KCBT wheat futures climbed 7.0 cents to $7.0175, and December MWE futures rallied 3.0 to $6.9925.

Wholesale weakness seemingly offset stable cash cattle quotes Friday. Country cattle prices dipped Thursday, but the size of the decline was smaller than many anticipated. Conversely, beef cutout values fell rather substantially Thursday and were mixed at noon Friday. That slippage apparently weighed upon CME futures ahead of the Friday afternoon Cattle on Feed report. December cattle futures settled 0.02 cents higher at 131.47 Friday, while April futures sank 0.50 cents to 132.57. Meanwhile, January feeder cattle inched up 0.12 cents to 163.50 cents/pound, and March feeders added 0.10 cents to 163.37.

Persistent cash weakness probably undercut hog futures. Although wholesale quotes proved surprisingly firm Thursday afternoon, that good news was apparently more than offset by sizeable country losses in the country cash markets. The fact that the current decline has persisted into late November is very likely worrying bulls. December hog futures fell 0.62 cents to 85.62 cents/pound to end the week, while April sagged 0.25 cents to 93.00.

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