Improved export prospects supported grain markets on Friday

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Corn futures firmed Friday after following soybeans lower Thursday night. The rise seemed to reflect technical and pragmatic factors, but persistent cash strength reportedly played a major role in the futures rise. 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 old crop gains were rather impressive. May corn rose 5.0 cents to $7.085/bushel at its Friday afternoon close, while December slipped 0.25 cent to $5.5675.

Soybean futures declined in apparent response to several bearish developments Friday. 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. Bulls likely touted another sizeable bean sale to China in support of their position, but fought an uphill battle. May soybeans settled 5.75 cents lower, at $14.435/bushel Friday. Aggressive short covering in the oil pit, as well as unwinding of crush spreads seemed to hit the market late in the day. May soyoil surged 0.58 cents to 49.70 cents/pound, whereas May meal lost $5.6 to $430.0/ton.

Despite a general dearth of supportive news, wheat futures proved surprisingly firm Friday. 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 6.5 cents to $7.205/bushel at the Friday close, while May KCBT wheat rose 3.25 cents to $7.56, and May MGE futures gained 3.5 cents to $8.0525.

Cattle futures posted mixed Friday closes after cash prices surged Thursday evening. Fed cattle traded actively at 128 cents/pound late Thursday, thereby marking weekly gains of 3-5 cents. Recent wholesale price strength almost surely supported futures as well. However, only the nearby contracts proved able to sustain their gains through the close, which may have reflected persistent industry concerns about the negative impact of the Federal government spending sequester (which may force numerous packing plants to close during the days and weeks ahead.) Ultimately, the late setback was not very encouraging. April cattle edged 0.17 cents higher, to 129.95 cents/pound at their Friday afternoon close, while August slipped 0.07 cents to 125.72. Meanwhile, April feeder cattle dropped 0.60 cents to 144.15 cents/pound, while August dipped 0.45 cents at 154.35.

Signs of cash firmness and the jump in cash cattle values supported CME lean hog futures 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 cash cattle and beef values also undercut optimism in the hog pit. Late morning news of ham price weakness did not help the situation. April hogs rallied 0.15 cents to 81.12 cents/pound late Friday, while June ended the week having lost 0.17 cents to 91.37.

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