Corn prices close higher on Friday as drought concerns remain firmly entrenched. Some light rain is forecast for the northern and eastern Corn Belt next week. However, the western Corn Belt is under stress from extreme heat and dryness that’s expected to persist through much of next week. September futures posted another new all-time high for a nearby contract at $8.28 ¾. Futures were 55 to 80 cents higher for the week.
Soybean futures were sharply higher as trading came to a close on Friday afternoon. New all-time contract highs were reached by nearby futures for soybeans and meal. Weather forecast maps are offering little reason for optimism that there soon will be a break from the drought. Instead, each passing day finds the soybean crop suffering from heat and lack of rain. Production prospects are seeing daily downgrades. Demand has shown little tendency yet to retrench, although that may soon occur. In late trading, soybeans were up 25 to 35 cents, soyoil was mixed, and meal was up $11 to $17.
Wheat futures spent most of Friday sharply mixed in midday trade, with all three exchanges showing some contracts slightly lower, some unchanged, and some slightly higher. Profit-taking ahead of the weekend was a factor in the selling, while new buying was still present with yesterday’s National Weather Service forecast that the blistering drought conditions for the Cornbelt will continue through August. There’s also some stress developing for spring wheat in the western edge of the Northern Plains and the August forecast is for more of the same, including below normal moisture for the Pacific NW as well. But when corn and soybean futures surged toward highs of the day near the close, wheat futures joined the move; tied to forecasts for next week to resume excessive heat and dryness after but brief, scattered rain and cooler temps occur through the weekend. At the close, CBOT wheat was 8 ¼ cents higher at $9.43 ¼; KCBT wheat 3 cents higher at $9.41 and MGE wheat 9 ½ cents higher at $10.31 ½.
After the gains earlier this week cattle prices closed under pressure as traders moved to the sidelines ahead of several key USDA reports. Fed cattle were also under pressure from further increases in the corn market and forecasts for excessive heat in the Plains which could force feedlots to move cattle more aggressively. After the close USDA reported July 1 cattle on feed at 102.6% of a year ago, near trade expectations. The July 1 inventory of all cattle and calves came in at is 97.8% of a year ago compared to expectations at 98.6%.
Hog prices traded lower much of the morning Friday, then turned higher, only to close mixed; with some contracts higher and some lower. Trader sentiment keeps oscillating between concern about liquidation due to rising feed costs and signs of tighter-than-expected supplies of hogs ready for slaughter now. Still, prices for hogs ready for slaughter in cash markets have moved higher this week in volatile trading as processors have had to scurry to secure necessary supplies. We suspect, however, that the sudden slowdown in slaughter hog supplies may be a simple reality of slower weight gains in the intense heat rather than smaller-than-expected numbers of hogs out there. The heat could actually be “bunching up” future market numbers once the heat finally breaks. At the close, August hogs were up .60 at $93.65, October down .35 at $79.65 and December down .32 ½ at $76.50.