Ag markets moved mostly higher Friday morning

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Japanese news offset negative early info from that China Friday morning. Corn traders worried about the wider impact of repeated Chinese rejections of American grain, had those fears exacerbated by an early morning announcement of another rejection. However, that news was offset by a subsequent announcement of a big sale to Japan. March corn futures rose 1.0 cent to $4.315/bushel late Friday morning, while May gained 1.25 cents to $4.3975.

 

Talk of Argentine crop problems boosted the soy complex. The soy and product markets were narrowly mixed in Thursday night trading. However, increased worries about Argentine production potential in light of growing heat and dryness over its soybean fields reportedly sparked a midmorning surge. January soybeans jumped 11.5 cents to $13.385/bushel around midsession Friday, while January soyoil ran up 0.14 cents to 39.47 cents/pound, and January soymeal climbed $3.6 to $445.7/ton.

Short covering may be boosting the wheat markets. Strength spilling over from the corn and wheat markets probably encouraged wheat buying as well. And while there will little substantive news, futures and hedge funds holding huge short positions were probably encouraged to cut their exposure, especially with the end of the calendar year looming in 10 days. March CBOT wheat futures bounced 0.5 cent to $6.1125/bushel just before lunchtime Friday, while March KCBT wheat futures advanced 1.5 cents to $6.5425, and March MWE futures moved up 1.5 to $6.4775.

Talk that US beef exports to China might improve boosted cattle futures. Firming cash prices boosted cattle futures in early Friday trading, but prices accelerated upward in reaction to a report that the U.S. and China are taking steps to ease the flow of American beef to the Asian giant. The February contract’s penetration of its 40-day moving average probably exaggerated the move. February cattle futures leapt 1.07 cents to 134.05 cents/pound in late Friday morning trading, while April futures surged 0.75 cents to 134.82. Meanwhile, January feeder cattle futures gained 0.45 cents to 167.25 cents/pound and March climbed 0.67 to 167.22.

Cash and wholesale weakness are depressing hog prices. The hog/pork industry has recently been anticipating the onset of a seasonal rebound from annual lows. However, big cash and wholesale losses posted late yesterday strongly suggested those lows have yet to be reached. February hog futures sagged 0.10 cents to 86.25 cents/pound as the lunch hour loomed Friday, but June added 0.20 to 100.35.

Failure to sustain early gains may have sparked cotton selling. Thursday’s weekly Export Sales report suggested export customers have been convinced that seasonal lows are in, and that now is the time to step up their purchases. Nearby futures also seemed strong technically. However, they proved unable to sustain their early momentum, which in turn appeared to spark active late-morning selling. March cotton dipped 0.12 cents to 83.21 cents/pound just before noon (EST) Friday, while July cotton declined 0.27 cent to 82.49.


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