Grain, livestock markets mixed Friday at midday

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Corn futures firmed Friday morning after following soybeans lower Thursday night. The rise seemed to reflect technical and pragmatic factors, since most news was not supportive. The soybean slide, weak economic news from China and Europe and the rising value of the dollar all seemed bearish. News that a widely followed private firm had boosted its forecast of the forthcoming Brazilian corn harvest apparently held negative implications as well. Thus, the modest nearby futures gains were rather impressive. May corn rose 4.5 cents to $7.08/bushel late Friday morning, while December slipped 1.25 cents to $5.5575.

Soybean futures declined in apparent response to several bearish developments. Two reports out of China indicated its manufacturing sector was not doing as well as previously thought. In addition, the latest weather forecasts suggest improved rainfall chances in Argentina in two weeks. Having a private source boost its estimate of the Brazilian soybean harvest by 500,000 tonnes was hardly supportive either. Bulls could tout another sizeable bean sale to China in support of their position, but were definitely fighting an uphill battle. May soybeans had fallen 15.75 cents to $14.365/bushel as lunchtime loomed Friday, while May soyoil dipped 0.31 cents to 48.81 cents/pound, and May meal lost $4.6 to $431.0/ton.

Despite a general dearth of supportive news, wheat futures proved surprisingly firm Friday morning. Neither weak economic news from China and Europe, improved Southern Plains moisture conditions, U.S. dollar strength, nor concurrent soybean losses seemed to deter bulls in the various wheat markets. Ultimately, these latest gains may simply reflect optimism about export prospects in the wake of recent price declines. May CBOT wheat futures surged 8.25 cents to $7.2275/bushel by late Friday morning, while May KCBT wheat rose 7.0 cents to $7.5975, and May MGE futures gained 9.25 cents to $8.11.

Cattle futures rallied Friday morning in response to Thursday evening news of big cash gains. After having recently traded at 123 cents/pound and bumping up to 125 in last-minute trading last week, fed cattle traded actively at 128 late yesterday. Choice cutout also posted a sizeable late-morning increase, thereby implying improving demand from farther up the processing/marketing chain. Conversely, uncertainty about the market impact of the looming government sequester probably limited the bullish CME response. April cattle edged 0.20 cents higher, to 130.05 cents/pound in late-morning activity, while August gained just 0.07 cents to 125.82. Meanwhile, April feeder cattle slid 0.12 cents to 144.80 cents/pound, while August dipped 0.27 cents at 154.60.

Signs of cash firmness and the jump in cash cattle values supported CME lean hog futures early Friday morning. However, late morning developments were not very friendly. Having bullish cattle traders prove able to sustain only a portion of early gains despite the rise in beef cutout also undercut optimism in the hog pit. Late morning news of ham price weakness did not help the situation. April hogs rallied 0.32 cents to 81.32 cents/pound late Friday morning, while June was unchanged at 91.47.

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