Corn prices are expected to open 5 to 8 cents lower on Friday. There has been no real change to weather forecasts. Parts of the Western and Northern sections of the Midwest got rain on Thursday night into Friday morning, but the southern part of the region remains hot and generally dry. Parts of South and Central Texas are expected to get rain this weekend from Tropical Storm Don. However, the rain is too late to help dryland crops. Corn futures were lower in overnight trade.
Soybeans are expected to open 2 to 5 cents lower on Friday. Futures traded lower overnight in a very tight range. Export demand is slow, with essentially no increase in total commitments for old crop in Thursday’s Export Sales report. The pace of shipments will have to increase if we are going to get to the USDA export forecast by the end of next month. Weather forecasts will take on increasing importance as we move into August. Hot and dry weather in August could get soybean futures to move out of the sideways trading that has been in pace for the last several weeks.
Wheat prices are expected to start the day a little higher on Friday. A late sell-off pushed prices into negative territory on Thursday but prices rebounded a little overnight. Trade is being driven in large part by short covering as traders close out contracts ahead of the end of the month. Traders are also getting out of the market until they have a better idea of how the debt ceiling stalemate will affect the economy. Recent strength in the U.S. dollar is an underlying negative factor for the wheat market.
Cattle futures are expected to open mostly steady on Friday. The cash market remains at a virtual standstill, with significant trade expected today. Higher futures prices on Thursday may force cash cattle trade at even with last week or maybe a little higher. However, the trades that were completed on Tuesday were at prices about $1 under week earlier levels. A few transactions were completed on Thursday at prices steady with last week. Actual cash sales prices will probably give some direction to futures later in the day. Cattle dressed weights for the week ending July 16 were down 7 pounds from the previous week, due in part to hot weather. Traders continue to exit the market, with live cattle open interest down 15,000 contracts last week.
Hog futures are expected to open higher on Friday. The pork cutout values continue to set record highs, with a gain of $1.84 on Thursday. The strong pork prices are pulling cash hog prices up as well and the national average price on Thursday was over $100 for only the second time in history. The declining hog weights have helped to fuel the price rally, but packers will begin to have access to contract hogs beginning next week which may dampen demand in the cash market. While it is still plenty hot in some areas, it is not like it was last week and hog weights are beginning to return to normal.
Cotton prices are expected to open lower on Friday with follow through selling from Thursday. Prices dropped on Thursday and then fell sharply in overnight trade. Cotton prices have been in a steep decline since the beginning of June. Futures are clearly oversold but the bearish demand situation is keeping pressure on prices. The latest bad news for cotton is that mill use in June was at a 3.5 million bale per year pace. The USDA’s forecast for domestic use is at 3.8 million bales. Mill use has been below the USDA’s forecast for the last five months and some reduction in USDA’s forecast is likely. That will just add to the ending stocks for the season just ending. The monthly consumption report will be discontinued after the August 25 edition.