Crop markets are bouncing from Thursday's big losses

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The grain and soy markets are rebounding from Thursday’s big losses. Talk of improved planting weather apparently triggered active selling in the grain and soy complexes yesterday, but the size of the resulting losses looks overdone. That’s very likely the reason for the modest overnight rebound. July corn bounced 2.5 cents to $5.095/bushel early Friday morning, while December gained 3.0 cents to $5.025.

The soy complex is also bouncing from support. Despite the tight old crop situation CBOT traders also sold soybean and product futures aggressively Thursday. However, bears proved unable to mount a significant challenge of major chart support last night, which seemingly triggered early morning gains. July soybeans rebounded 5.0 cents to $14.66/bushel around dawn Friday, while July soyoil ran up 0.44 cents to 41.60 cents/pound, and July soymeal rose $1.2 to $477.91/ton.

Wheat futures came back from Thursday’s losses as well. The wheat markets also fell Thursday despite several supportive factors. Those probably helped power the overnight bounce, particularly the final reports from the Wheat Quality Council tour posted yesterday afternoon. The Black Sea situation also seems to be heating up, which may bode ill for production prospects later this year. July CBOT wheat futures rallied 4.0 cents to $7.1125/bushel in early Friday trading, while July KCBT wheat futures surged 5.0 cents to $8.09, and July MWE futures climbed 4.5 to $7.6575.

Cash strength is supporting cattle futures. Contrary to widespread expectations for big seasonal losses during spring, country cattle prices proved surprisingly strong Thursday. The indicated $1/cwt (cent/pound) rise to the $148 area sent CME futures strongly higher yesterday and seemed to support the Chicago market last night as well. June cattle steadied at 139.25 cents/pound early Friday morning, while December added 0.05 cents to 144.40. Meanwhile, August feeder cattle increased 0.27 cents to 190.75 cents/pound, but October skidded 0.07 cents to 190.90.

Pork weakness continued undercutting CME hogs. Cash hog prices reportedly proved rather firm Thursday, but pork cutout suffered sizeable losses once again. That weakness, as well as negative technical developments, appear to be depressing hog futures as Friday’s action gets underway. June hog futures fell 0.50 cents to 122.30 cents/pound as Friday dawned over Chicago, whereas December inched up 0.02 to 93.42.

Cotton futures rebounded in concert with the other crop markets. The cotton market proved much less vulnerable to selling than did its Midwest counterparts Thursday, but it did spend the past two days consolidating Tuesday’s big surge. Bulls are likely looking for a follow-through to that gain, especially with Texas growing conditions looking so poor at this juncture. July cotton advanced 0.64 cents to 94.84 cents/pound soon after sunrise (EDT) Friday, while December cotton lifted 0.44 to 83.82.

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