Weak financial markets seemed to depress ag futures Friday

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Corn futures were weak Friday, with the negative effects of the monthly Employment report and the poor reactions by the equity indexes apparently weighing upon prices. Dollar gains versus the Japanese yen after that country undercut the value of their currency may also have weighed upon exported commodities such as corn. May corn ended the week having slipped 0.25 cent to $6.29/bushel Friday afternoon, while December dipped 5.0 cents to $5.35.

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 depress soybean futures again Friday. 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. Meanwhile, firming palm oil markets apparently supported soy oil values. May soybeans closed 10.0 cents lower at$13.6175/bushel Friday, while May soyoil climbed 0.43 cents to 48.83 cents/pound, and May meal lost $5.4 to $391.8/ton.

Weakness spilling over from the corn and soybean markets also seemed to undercut wheat futures Friday morning. However, fresh talk of active Chinese purchases of U.S. grain reportedly returned to the market (after powering the big advance seen Wednesday), thereby reversing the early losses. May CBOT wheat futures surged 6.0 cents to $6.99/bushel in late Friday trading, while May KCBT wheat gained 4.25 cents to $7.26 and May MGE futures added 1.0 cent to $7.875.

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. June cattle dropped 0.85 cents to 121.50 cents/pound at their Friday afternoon settlement, while December tumbled 1.00 cent to 128.05. May feeder cattle futures dove 1.65 cents to 144.30 cents/pound, and August plunged 1.62 cents to 151.20.

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 seemingly did little to limit losses. The lightly traded May contract crashed 2.25 cents to 86.90 cents/pound its Friday close, while June plummeted 2.32 cents to 89.70.

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