Grains close the week on a weak note

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Corn futures were lower on the close on Friday, but the market clawed back from sharply lower values. It was First Notice Day for the December contract. Many traders were not expecting any delivery notices to be posted against the December contract. Instead, deliveries totaled 246 contracts. Additionally, news of heavy notices for wheat weighed on that market. Both markets have experienced recent rallies on talk of increased demand. The large notices somewhat puncture that popular view. At the close, the December contract was off 3 1/2 cents at $7.48, March was off 6 cents at $7.52 3/4, and December 2013 closed off 3/4 cent at $6.35 1/2.

Soybean prices were lower giving back a portion of recent gains. Some of the soybean weakness may be linked to strong selling pressure in the corn and wheat markets today on news of hefty First Notice Day deliveries. Soybeans don’t trade a December contract, so there is no comparison to be made for bean deliveries. The deliveries in the other grains raised questions about export demand in general, which was disappointing in the weekly export sales report. Further, there are reports overnight of China beginning to contract beans from Brazil. At the close, January beans were off 9 1/4 cents at $14.38 3/4 while November 2013 lost 4 3/4 cents at $13.04 1/2.

Wheat prices closed double-digits lower Friday and near the lows of the day. A combination of factors was at work. First the International Grains Council came out after Thursday’s close with its first estimate of global wheat acreage for 2013. It put it 2.2% higher than in 2012 and at the highest level in 15 years. Then there was word from India that more than doubled the amount of reserve wheat that country would put on the export market, now offering 4.5 million tonnes instead of just 2 million. And of course, being a Friday, there was profit-taking activity by speculators after strong gains this week. At the close, CBOT March wheat was down 22 cents at $8.63 ½; KCBT March was down 21 ¾ at $9.13 ¼ and MGE March was down 14 ½ at $9.36 ¾.

Live cattle and feeder cattle futures settled lower on Friday. Prices were under pressure all day as some traders closed out positions ahead of the end of the month and the lower prices triggered sell stops under the market. The cash cattle market remained quite through at least the middle of the day Friday and feedlot operators were holding on to offers a little above those received last week. The February live cattle contract settled at $130.40, down $1.70. June was $1.15 lower at $130.78. January feeder cattle prices declined by $1.13 and settled at $145.63.

Lean hog futures settled mixed on Friday. Prices were lower across the board through much of the session but there was a minor rally late in the day. Reports from cash markets showed that prices were continuing to rise, with the national average price close to $80. The pork cutout was down on Thursday, but slaughter on Saturday is expected to be large, probably near 250,000 head. The February contract settled down 20 cents at $86.93, but June managed a 25 cents gain to a new high of $101.53.

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