Ag markets seem set to end the week poorly

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Chinese news seemed to depress corn futures Thursday night. Corn prices rebounded modestly the past two days, so traders are probably more interested in taking profits before the weekend than in adding to longs. That selling was exaggerated by a downward revision to Chinese consumption estimates and talk of excessive supplies. July corn sank 2.75 cents to $4.4775/bushel early Friday morning, while December slipped 1.5 to $4.46.

The soy complex is also declining ahead of the weekend. Beans, meal and especially soyoil have rebounded from rather depressed levels the past few days. However, they turned lower in concert with the grain markets in early trading, despite a general lack of news. Fresh Asian palm slippage is apparently weighing on oil prices, whereas beans and meal are struggling at moving average resistance. July soybeans tumbled 7.0 cents to $14.1375/bushel Thursday night, while July soyoil dropped 0.29 cents to 40.32 cents/pound, and July soymeal sagged $0.9 to $450.3/ton.

The wheat markets are also under pressure. Unlike the corn market little wheat news emerged overnight. That may be one reason golden grain prices followed those of their yellow counterpart downward. Unless something changes, which is entirely possible, long-liquidation seems likely to dominate today’s trading. July CBOT wheat futures stumbled 2.25 cents lower to $5.9125/bushel in early Friday action, while July KCBT wheat lost 3.5 cents to $7.2575, and July MWE futures skidded 0.25 to $7.0275.

CME cattle set back from Thursday’s highs as well. Live cattle futures leapt Thursday, with the nearby contracts posting fresh high closes in response to news of modest gains in southern Plains cash quotes. However, concerns of seasonal post-Independence Day weakness probably reemerged quickly, thereby causing a general setback last night. August cattle slumped 0.42 cents to 147.05 cents/pound as Friday dawned over Chicago, while December declined 0.25 to 150.52. Meanwhile, August feeder cattle futures edged down 0.17 cents to 207.37 cents/pound and October fell 0.67 to 208.00.

Hog futures posted a mixed overnight performance. Surging cattle prices probably encouraged hog buying Thursday, particularly when midsession swine and pork quotes were also quite strong. However, afternoon cash prices probably disappointed bulls, which may explain futures mixed Thursday night action. August hog futures rose 0.27 cents to 130.02, while December slipped 0.20 cents to 96.80.

Cotton futures also seem set to end the week on a downward note. The ICE cotton market also felt selling pressure Thursday night, with news being rather sparse. One has to suspect Texas weather forecasts with a chance of showers virtually every day next week encouraged bears. July cotton futures slid 0.21 cents to 88.15 cents/pound shortly after sunrise Friday, while December cotton dipped 0.24 to 76.89.

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