Crop markets set back from early-Friday highs

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Long-liquidation reversed early Friday corn gains. The Black Sea situation, sustained export strength and U.S. dollar weakness boosted the grain and soy markets Thursday night. However, the greenback bounced in response to the monthly U.S. Employment report and may have triggered profit-taking by bulls ahead of the weekend and Monday’s WASDE report. Corn futures are now trading lower on the day. May corn slipped 0.75 cent to $4.9025/bushel late Friday morning, while December lost 3.75 to $4.855.

The soy complex bounced from midmorning lows. The export, geopolitical and currency issues that powered grain prices higher overnight did so for soybean and product prices as well. The complex also suffered a sharp midmorning reversal on pre-weekend and pre-report long-liquidation. However, beans and meal rebounded again by late morning, whereas the oil market proved unable to get off the floor. May soybeans surged 12.5 cents to $14.5025/bushel just before lunchtime Friday, while May soyoil slid 0.17 cents to 44.37 cents/pound, and May soymeal advanced $4.1 to $455.5/ton.

The wheat markets also rebounded somewhat from early Friday lows. Events on the Black Sea are rather obviously causing concerns about the availability of grain supplies from that region. Less than ideal conditions in several regions, particularly the U.S. southern Plains, probably spurred early buying as well. The wheat markets also suffered a midmorning bout of aggressive profit-taking, but rebounded from those lows before midday. However, they’re now trading well below the early highs. May CBOT wheat futures bounced 7.25 cents to $6.5325/bushel in late Friday morning action, while May KCBT wheat futures vaulted 6.5 cents to $7.1975, and May MWE futures ran up 5.75 at $7.01.

Talk of persistent wholesale strength seemingly boosted cattle futures. News that cash prices had suffered a significant decline despite concurrent wholesale gains depressed cattle futures this week. However, belated talk of persistent beef gains reportedly enabled CME prices to rebound from overnight lows. April cattle futures inched up 0.12 cents to 143.27 cents/pound around midsession Friday, while August rallied 0.30 cents to 130.45. Meanwhile, April feeder cattle climbed 0.40 cents to 173.20 cents/pound, and August gained 0.32 to 175.75.

Hog futures remained quite strong again Friday morning. Talk of sharply reduced hog slaughter this week and in the coming weeks has greatly encouraged bullish hog traders lately. CME futures reacted well to the latest news Thursday night, but have seemingly struggled to maintain their upward momentum this morning. One has to wonder if long-liquidation will hit the market as the week’s trading winds down. April hogs advanced 1.02 cents to 113.42 cents/pound late Friday morning, while June added 1.42 to 120.77.

Cotton futures also backed away from early gains. Thursday’s Export Sales report may have set the stage for the subsequent technical breakout to fresh nine-month highs. The market built upon those gains early this morning, but couldn’t sustain the advance. Profit-taking and position-squaring ahead of the weekend and Monday’s monthly WASDE report seemed to trigger the midsession setback. May cotton had risen just 0.14 cents to 91.75 cents/pound around midday (EST) Friday, while December cotton tumbled 0.71 cents to 78.84.

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