Corn futures are expected to open mixed on Friday. Old-crop futures were up and new-crop futures were down in overnight trade. Rain fell overnight in Eastern Iowa and Northern Illinois and significant rain is expected through the Corn Belt over the weekend. This is putting pressure on new crop corn prices. With a significant amount of the 2012 crop planted and emerged, the rain should be positive for yield potential. Developments in outside markets are expected to be mostly negative with the Dow Jones futures down and the dollar stronger in overnight trade.
Soybean futures are called mixed Friday. New-crop soybean prices were steady to lower overnight while old-crop prices ticked up modestly. There have been several reports of new export sales this week and it looks like the old-crop supply and demand balance is tightening. USDA reported export sales were strong for soybeans at 1.7 million tonnes (62 million bushels). Reports coming out of Argentina continue to indicate actual soybean yields are lower than expected, with many groups now forecasting production near 41 million tonnes, well below the last USDA forecast of 45 million. If production is lower than expected, the outlook for U.S. exports and prices are even more favorable.
Wheat prices are expected to open 3 to 6 cents higher on Friday. Forecasts for hot weather over the Southern Plains gave the market a little boost overnight. The winter wheat crop in the regions is at a critical stage of development. However, the annual wheat crop tour ended yesterday and the group put the average yield for Kansas wheat at 49.1 bushels per acre, the highest level in a decade. The market is clearly focused on the supply and demand balance for the new crop and the balance looks a little bearish unless significant weather problems develop.
Cattle futures prices are expected to open mixed. Cattle futures exhibited a strong rebound on Thursday with June contracts closing at the limit and USDA reporting strong export sales data for beef. Profit taking based on yesterday’s price rally is expected to add pressure on cattle futures contracts. Boxed beef cutout prices were down 22 cents for choice at $190.96 and select up 47 cents to $186.90.
Hog futures are expected to open mixed on Friday. There may be a little carry-over buying from the solid gains on Thursday, but lower cash hog and pork prices will be bearish for early session trade. Hog futures got support from big gains in the cattle sector Thursday, but cattle futures are also expected to be steady to lower on Friday. Traders still hope for the seasonal increase in hog prices, but at least for now prices are moving in the wrong direction. Cash hog prices hit a new low for the year on Thursday.
Cotton prices are expected to open 10 to 40 points higher on Friday. The cotton market has been quiet all week with the July contract holds basically between 89 cents and 90 cents per pound. The data in Thursday’s Export Sales report was mixed – with cancellations exceeding new sales, reducing total commitments. But export shipments were well above the weekly level needed to reach the USDA forecast for the current crop year. Parts of Alabama got decent rain overnight, but the system didn’t spill over into Georgia.