Corn futures traded higher overnight, up 5 to 8 cents. Grain markets in general gained strength from talk that Ukraine might soon ban wheat exports. But the corn market does have strong fundamentals on-its-own. The basis is strengthening, suggesting that harvest sales are drying up and the corn that is left is in stronger hands. The longer term outlook for the corn market remains bullish.
Soybean prices are 5 to 8 cents higher in overnight trade. Export sales remain very strong. Less than 2 months into the crop year and sales already total 71% of USDA’s forecast for the year. Shipments are also high, at 14% of the forecast, compared to an average pace of about 8 percent. The strong gains in the wheat market are also supporting soybean futures on Friday morning.
Wheat prices are up from 10 to 15 cents Friday morning. Rumors circulated that Ukraine will impose an export ban on wheat beginning November 15. Wheat exports from Argentina may also be smaller than previously thought. The tight world supplies haven’t resulted in strong U.S. wheat export sales yet, but all the data points to strong sales in the second half of the crop year.
Cattle markets are trading steady to 25 cents higher early Friday morning. Traders continue to wait for developments in the cash market before making any strong move in either direction. So far the cash market has been very quiet with bids about $5 under asking prices. The Cattle on Feed report will be released at 2 Central Time this afternoon. Analysts expect September placements to be down by about 15% year-over-year and the October 1 inventory is put at 3% lower. Beef prices were higher on Thursday for the sixth consecutive day.
Hog futures prices were mixed in overnight trade. Nearby contracts posted small gains while deferreds were a little lower. Cash hog prices were higher on Thursday and that should give nearby futures a little boost. The December contract is about $4 under the current cash hog price. Sow slaughter was up about 8% year-over-year in the week of October 6. That suggests that the breeding herd is being reduced which is a positive for hog prices in 2013.
Cotton futures are trading 60 to 80 cents lower on Friday morning. Export sales for last week came in at about 210,000 bales but year-to-date sales are behind the year-ago pace. Prices rallied strongly earlier this week due to limited supplies of tenderable cotton. By Thursday traders were thinking merchants might ship foreign cotton to fill some export commitments. That led to lower cotton prices on Thursday and it looks like prices might continue lower on Friday.