Corn prices are set to open 2 cents to 6 cents higher on Friday. The corn market continues to be supported by rumors that China is buying U.S. corn. No sales to China have been confirmed, but the increase in prices on Thursday and again overnight suggests some activity. The market may also be supported by some gains in the stock market and a modest decline in the value of the dollar. The export shipments reported on Thursday were above the level needed to stay on pace to reach USDA’s forecast for the crop year.

Soybean prices are expected to open about 5 cents higher. Soybean prices are benefiting from the gains in the corn market. Overnight developments in outside markets were also positive for the soybean sector. Prices have been drifting lower over the last two weeks, especially new-crop contracts and the market is vulnerable to long-liquidation. The underlying fundamentals remain bullish, but the market seems to need some new news to move higher.

Wheat prices are expected to open steady to a little lower. The weakness in the value of the dollar and the modest strength in the other crops were not enough to keep wheat prices from declining slightly in overnight trade. The export shipment data out on Thursday was a little disappointing and good rains in the Eastern Dakotas and Western Minnesota also put pressure on wheat prices. Wheat futures have trended down since the beginning of the month and the July contract is near the top of the range. A higher close could signal at least a short term uptrend.

Cattle futures are expected to open25 cents to 50 cents higher. Cash cattle traded above prior week levels on Thursday and that should provide support to cattle futures prices. Cash prices paid in Nebraska and Iowa were up $4 to $5 from last week’s levels but trade volume was light. Buyers need more cattle to fill slaughter schedules and cash bids should be steady to higher on Friday. The Cattle On Feed report will be released after the market closes. The report is expected to show a big year-over-year decline in feedlot placements in March, but lower marketings too. Recently the low slaughter levels have been offset by heavy weights. The most recent data shows weights up more than 22 pounds compared to year earlier levels.

Hog prices are expected to open 10 cents to 50 cents lower. Cash hog prices fell on Thursday and there are few signs of life in the cash market. The pork cutout value did post a modest gain on Thursday, but cutouts are still nearly a dollar below the cash hog price. Slaughter levels will be down this week with almost no activity on Saturday. Cash market trade activity is expected to be very light on Friday. Futures trade activity is also expected to be limited.

Cotton prices are expected to open steady to about 50 points lower. The news in Thursday’s export sales report was mixed with cancellations exceeding new sales for 2011/12 cotton, reducing total commitments. But shipments were solidly above the weekly pace needed to reach USDA’ forecast for the crop year. There is rumors that China may soon issue a supplemental import quota which could boost U.S. exports. The weaker cotton prices on Friday may be some profit-taking ahead of the weekend. Cotton prices have posted solid gains over the last two days.