Cotton rallied despite big losses in other ag markets Friday
Corn futures seemed to suffer from spillover weakness Friday morning. Although some sources blamed China’s latest cancellation of U.S. corn imports over non-approved GMO content for early losses, that seems like old news. Ultimately, the same rainfall and precipitation forecasts weighing upon wheat futures also appear to be undercutting corn. Long liquidation is probably exaggerated ahead of the weekend. May corn slid 3.5 cents to $4.965/bushel late Friday morning, while December sagged 1.0 to $5.005.
The tight supply situation seemingly limited soy losses. The tightness of the domestic situation probably offered support for old crop soy values this morning, but active long liquidation and spread covering reportedly dragged nearby bean futures lower. Deferred futures held up better, which may reflect ideas that forthcoming weather will be conducive to accelerated corn plantings, which in turn might limit bean acreage. May soybeans declined 9.5 cents to $14.6575/bushel by late Friday morning, while May soyoil skidded 0.11 cents to 41.56 cents/pound, and May soymeal dipped $5.5 to $474.6/ton.
The latest weather forecasts again appear to be depressing wheat markets. Although the latest weather forecasts don’t seem particularly promising on the moisture front, wheat futures posted across-the-board losses Friday morning. Wire service reports cited improved weather for the drop, but we suspect a significant technical component to the selling as well. May CBOT wheat futures fell 12.25 cents to $6.6375/bushel shortly before lunchtime Friday, while May KCBT wheat futures dropped 14.25 cents to $7.2975 and May MWE futures tumbled 13.25 cents to $7.1725.
Cattle futures suffered from spillover hog weakness. Big losses in the hog pit seemed to spill over into cattle futures this morning. That may have exaggerated concerns about a potential drop in country cattle prices today, especially with wholesale beef prices reportedly proving quite weak as well. The futures drop may be a self-fulfilling prophecy for today’s cash trading. June cattle futures plunged 2.22 cents to 135.15 cents/pound around midsession Friday, while December dove 2.02 to 138.90. Meanwhile, May feeder cattle sank 1.85 cents to 178.27 cents/pound, and August lost 1.77 to 180.05.
Big wholesale losses sparked strong hog selling. Cash hog quotes proved quite firm Thursday afternoon, but pork cutout values plummeted. The breakdown clearly triggered active selling in CME hog futures Friday morning. Most contracts locked at limit-down levels despite signs of a wholesale rebound. June hog futures crashed the daily 3.0-cent limit to 120.55 cents/pound in late Friday morning action, while December tumbled 2.37 to 89.12.
Cotton futures bucked the bearish trend Friday morning. The cotton market continued its recent decline Thursday night, but bounced from major moving average support as Friday dawned. But the rise may actually have been driven by ideas that improved southern Plains conditions will lead to reduced winter wheat abandonment and lower cotton plantings this spring. May cotton leapt 2.07 cents to 93.05 cents/pound at midday Friday, while December cotton bounced 0.55 to 79.99.
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