Corn futures were sharply higher on Friday. Corn prices were higher led by May and July futures. Another round of export sales were confirmed by USDA this morning. Five million bushels were sold to China for the current marketing year along with a huge 57 million bushel sale designated to an unknown destination for delivery in 2012/13. This is the largest daily sale reported since 1991. Exports sales over the past week now total 112 million bushels. The sales have rejuvenated the export market. May corn settled 29 cents higher at $6.53. The December contract was 3 ¾ cents higher at $5.38 ¾.
Soybean futures settled higher on Friday. The soybean market this week traded bullish fears of limited supplies against demand due to soybean production losses in South America that are worse than earlier forecasts. This is producing some panic on the part of global consumers to cover forward needs just in case there is new evidence of further supply cutbacks. China made a splash overnight with large purchases of both corn and beans. Nearby futures traded over $15 for the first time since July 2008. May futures closed 15 1/2 cents higher at $14.96 3/4 and November added 3 1/4 cents at $13.62.
Wheat futures closed solidly higher Friday. Reports of Midwestern frost and freezes plus some chatter about a disease threat to soft red winter wheat in Ohio were a factor early on, particularly at the CBOT. But they’re not likely to cause any statistically significant damage to the wheat crop overall; and certainly not enough to offset the benefit of a much improved rain outlook for both the northern and southern Plains states and western Canada in the coming week. The biggest driver for wheat today was the big surge in corn futures tied to large export sales to China. With wheat competitive with corn as a feed-grain, frequently “as corn goes, so goes wheat.” CBOT May closed 16 ¼ cents higher at $6.42 ¼; KCBT May closed 7 ¼ cents higher at $6.46 ½; MGE May closed 6 ¼ cents higher at $7.74.
Cattle futures closed mixed on Friday. June futures posted a new contract low in early trade, but bounced back on short covering and strength in the corn market. Reports indicate cash trade was $2 to $3 lower from a week ago. With lower fed cattle prices along with the recent strength in the beef market, packer margins have improved to near breakeven for the first time in several months. Cattle slaughter this week is estimated 611,000 head, down 1.6% from a year ago. June cattle futures settled 47 cents higher at $112.85. August was 10 cents higher at $115.55.
Lean hog futures closed lower again on Friday. Hog futures declined by between 50 cents and $1 in most contracts as the weak cash market continues to weigh on the market. Prices for both hogs and the pork cutout are very close to the lows for the year keeping hog futures under pressure. The May contract was down $1.30 at $85.50 and June was 83 cents lower at $86.60.