Grain complex closes sharply higher on Friday

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Corn futures closed limit up on Friday. Corn futures turned substantially higher on a bullish USDA stocks report. Corn ending stocks for 2011/12 were estimated at 988 million bushels, approximately 132 million bushels below trade estimates and nearly 200 million bushels below USDA’s September 2011/12 ending stocks projection. And as a result, corn prices trading limit up reversing losses incurred over the previous trading sessions. December corn closed up 40 cents.

Soybean futures closed sharply higher on Friday. USDA’s stocks report was not particularly friendly for the soybean market today. In fact the report was somewhat bearish for soybeans versus trade expectations with ending stocks reported at 169 million bushels. This figure was above the September WASDE projection as well as higher than the upper range of pre report estimates. Nevertheless, it is a low ending stocks figure and the 2012 crop remains substantially below normal. However gains in the corn and wheat markets are lifted soybean prices as well as export sales to China in the amount of 180,000 tonnes of soybeans. November soybeans closed 27 ¼ cents higher.

Wheat futures closed sharply higher at midday. USDA’s stocks report was price friendly for wheat. Ending stocks were reported at 2.10 billion bushels, this figure was on the low end of range estimates and below the average of analysts’ estimates. The small grains summary was price neutral. Planted and harvested acres were close to August WASDE estimates with final wheat pegged at 2.269 billion bushels only 1 million bushels above the August WASDE estimate. December wheat at CBOT closed 44 cents higher; KCBT closed 47 ¾ cents higher; and MGE closed 44 ¼ cents higher.

Live cattle futures closed lower on Friday. Live cattle futures just couldn’t muster up enough strength to overcome weakening market fundamentals. Prices traded defensively, weighed down by sharply lower cash prices this week and sharply lower wholesale beef prices. Cash prices are reported down by as much as $3 to $4 dollars while wholesale dropped a whopping $2.26 for select cuts and $2.74 cents for choice cuts at midday. October closed 38 cents lower while December closed 48 cents lower.

Lean hog futures closed mostly higher on Friday. The sharp jump in corn prices moved some traders to sell positions in the October contract and buy into deferred contracts on the inclination that rising corn prices will cause producers to cut back on herd numbers. Futures were also supported by continued cash market strength. USDA released its quarterly hogs and pigs report this afternoon at 2pm CDT. The report forecast total inventory at 67.50 million head, slightly higher than the previous year. The breeding herd inventory was forecast at 5.79 million head, down 18 thousand head from the previous year. October closed down 5 cents while December closed up 15 cents and 2013 contracts (April –August) posting triple digit gains.

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