Grain markets declined again Friday morning

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Corn futures were mixed late Friday morning, with little substantive news available to push prices in either direction. One could argue that growing concerns about Chinese demand amidst its problems with a new bird flu strain would weigh upon feed demand are weighing upon deferred futures. Equity index and U.S. dollar losses in the wake of the weak Employment report may be having offsetting effects upon the commodity markets. May corn had edged upward 1.0 cent to $6.31/bushel by late Friday morning, while December dipped 2.75 cents to $5.3725.

Talk that China will be forced to cull a large portion of its domestic poultry flock in its efforts to contain the latest bird flu outbreak seemed to weigh upon soybean futures again Friday morning. Of more substantial concern may be the huge South American crop and its potential impact upon global soy values when the current harvest is completed. Firming palm oil markets may be supporting soy oil values. May soybeans dropped 12.50 cents to $13.595/bushel around mid-session Friday, while May soyoil gained 0.04 cents to 48.59 cents/pound, and May meal lost $5.1 to $392.0/ton.

Weakness spilling over from the corn and soybean markets also seemed to depress wheat futures Friday morning. Disappointment with late-week sales announcements, especially in the wake of large rumored sales Wednesday, is probably weighing upon prices as well. Finally, India appears to be moving closer to lowering its asking prices in order to push some of its massive inventory onto the world market; that could undercut prices across the board. May CBOT wheat futures slipped 0.5 cent to $6.935/bushel in late Friday morning trading, while May KCBT wheat sank 1.25 cents to $7.205 and May MGE futures slid 1.5 cents to $7.85.

After rising moderately Thursday night, cattle futures turned downward in response to the weak result of the monthly U.S. Employment report. The fact that late actions by Japanese central bankers have sent the yen sharply lower may also be undercutting the livestock markets, since that raises the relative cost of American red meat in that country and probably across East Asia. Flat midday beef prices did not help the bullish cause. June cattle slumped 0.40 cents to 121.95 cents/pound just before lunchtime Friday, while December tumbled 0.60 cents to 128.45. May feeder cattle futures lost 0.62 cents to 145.32 cents/pound, and August declined 0.85 cents to 151.97.

Hog futures also seemed to suffer from the latest economic/financial market developments. Again, weak employment data and declining equity values suggests slower economic growth, while the declining yen could slow U.S. pork exports. Midsession reports of significant cash market gains may limit losses and/or spark a bounce to end the week. The lightly traded May contract dropped 1.02 cents to 88.12 cents/pound in late Friday morning trading, while June dove 1.47 cents to 90.55.

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