Favorable weather remains dominant theme in ag markets

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Favorable weather remains the dominant theme in the crop markets. Current weather forecasts continue pointing to periods of sunshine and rain that seems likely to enable producers to get their crops planted and for those seeds to germinate and grow quickly. The implied increase in fall crop prospects is weighing on corn futures. July corn stalled at $4.695/bushel Thursday night, while December lost 1.25 cents to $4.6175.

The soy complex got off to a mixed Friday start. Predictions for persistently favorable spring weather seemed to weight on soybeans, particularly new crop futures, Thursday night. Meanwhile, sustained Asian palm oil weakness exerted fresh pressure on the oil market, whereas the strength of underlying demand once again boosted meal prices. July soybeans slipped 1.5 cent to $14.975/bushel early Friday morning, while July soyoil tumbled 0.23 cents to 39.18 cents/pound, and July soymeal gained $1.0 to $499.4/ton.

The wheat markets also reacted to the fine weather. Although wheat futures rallied in early Thursday trading, they couldn’t sustain the rebound from recent losses. Ultimately, badly needed rainfall over Kansas wheat fields and gaps between showers in the Northern Plains seem to be dragging the whole complex lower. July CBOT wheat futures slid 1.75 cents to $6.3075/bushel soon after dawn Friday, while July KCBT wheat sank 2.75 cents to $7.2775 and July MWE futures dipped 1.75 cents to $7.1275.

Cattle futures are building upon mid-week gains. CME futures turned decidedly higher this week as wholesale prices marched upward and packers paid unexpectedly high prices for fed cattle. Beef cutouts did decline Thursday afternoon, but that seemingly did little to deter CME bulls last night. June cattle climbed 0.30 cents to 138.32 cents/pound in Thursday night action, while December rallied 0.17 cents to 146.22. Meanwhile, August feeder cattle advanced 0.37 cents to 197.42 cents/pound, and October moved up 0.20 to 198.60.

Mixed spot news caused divergent action in CME hogs. Hog futures fluctuated rather widely Thursday, but closed rather weakly. Big pork losses seemed to weigh on the complex and kept nearby June futures under pressure last night. However, news of cash hog strength seemed to encourage bulls in the deferred contracts. June hog futures lost 0.50 cents lower at 113.80 cents/pound in early Friday trading, while December bounced 0.12 to 94.77.

Cotton futures are also beginning Friday in mixed fashion. The cotton market is similar to soybeans in the sense that the old crop situation is rather tight and new crop prospects seem quite good. Thus, it isn’t terribly surprising to see the nearby contracts rising slightly while deferred futures slide. Still, given the size of recent losses, it wouldn’t be terribly surprising to see cotton futures post a concerted rise. Of course, today’s Export Sales report could move the market as well. July cotton rose 0.41 cents to 86.56 cents/pound shortly after sunrise Friday, while December cotton slipped 0.13 to 78.35.

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