Grains close mixed on Friday

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Corn futures closed higher on Friday. Futures were down early along with the other grains, but an announcement from EPA that they had denied granting a waiver of the ethanol mandate sparked a recovery rally. While this decision was widely expected, it still provided a psychological boost for prices, particularly after the sell-off through much of the week. Weekly corn export sales were sluggish again at only 4.1 million bushels for the current marketing year. Oddly sales for 2013/14 were double the current year. December futures tested the low made earlier this week near $7.10 before rebounding higher. December corn futures settled 5 3/4 cents higher at $7.27.

News out of China of large soybean import cancellations pulled the rug out from under the soybean market on Friday. At the close, January was down 18 3/4 cents at $13.83 1/4. New-crop November lost 8 1/4 cents to close at $12.62 1/2. These were new lows for the late 2012 bear market. Soybean meal and soyoil lost considerable value, too. According to the China National Grain and Oils Information Center, Chinese traders have cancelled about 600,000 tonnes of U.S. soybean purchases. The beans would have been shipped from the U.S. soon for delivery to China in December and January.

Wheat futures closed lower Friday, but off the midsession lows. Weekly export sales came in at the lower end of pre-report expectations and reports of China cancelling some purchases of U.S. soybeans had soybeans down hard as well. Making things worse, wheat futures have now broken below some important chart support points, triggering additional selling pressure on technical reasons. Even at USDA’s new, lower export forecast, there remains a 210 million bu. gap between sales to date and where they should be, based on history. On the plus side, U.S. prices are said to be becoming more competitive after this week’s decline. Even Egypt, the most price-conscious wheat importer in the world, reported today that their next purchase would likely be shared 50/50 between the U.S. and France. At the close, CBOT December was 7 ½ lower at $8.53 ¾; KCBT December closed down 10 ¾ at $8.92 ¾, MGE December closed 9 ¾ lower at $9.21.

Live cattle futures ended higher on Friday after drifting lower early in the session. Cash trade was underway Friday with prices steady with a week ago at $125-$126. The Cattle on Feed report showed a 12.5% decline in placements, a 2.8% increase in placements with November 1 cattle on feed down 5.3%. The estimates were near trade expectations, but reinforce the outlook for tightening beef supplies going forward. December cattle closed 55 cents higher at 126.15.

Lean hog futures closed higher. Futures bounced back from early losses. IA/MN cash hogs were 34 cents higher to $74.68. Eastern Corn Belt cash hogs, though, were $1.43 lower at $72.85. Pork prices were under pressure this week. On Friday the cutout was down another 93 cents to 82.23. Weakness in the pork market has been a check on futures, but the longer-term uptrend remains intact. December CME lean hogs settled 25 cents higher at $80.32.

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