Corn traders seem to be taking profits before the weekend. Despite continued equity market strength and a more stable currency situation, as well as more evidence of Russian government moves to curtail its wheat exports, the crop markets have turned decidedly lower night. Corn futures followed wheat downward, thereby seeming to reflect bullish profit-taking and farmer selling in the wake of this week’s gains. March corn futures dipped 2.25 cents to $4.0875/bushel late Friday morning, while July lost 2.5 to $4.2375.
Beans and meal have also set back. Renewed talk of demand strength supported the soy complex earlier this week, particularly with the stock indexes staging a powerful recovery from big losses. Soyoil still seems hostage to developments in the crude and palm markets and followed crude higher in early trading, but beans and meal declined in concert with corn and wheat. Again bullish position-squaring and farmer selling are probably weighing on those markets. January soybean futures slumped 7.0 cents to $10.28/bushel as the lunch hour loomed Friday, while January soyoil gained 0.12 to 32.01 cents/pound, and January meal slid $4.1 to $361.2/ton.
The Russian-powered wheat surge has lost its upward momentum. Russia’s Association of Grain Exporters announced overnight that it has stopped buying Russian grain for export due to government pressure, which essentially confirmed the widespread belief that officials in that country were creating de facto export restrictions. However, wheat futures turned decidedly lower. Such negative reactions to bullish news are often viewed as signaling that the preceding rally has ended. Of course, that might not be true in this case. March CBOT wheat tumbled 13.75 cents to $6.415/bushel in late Friday morning action, while March KC wheat fell 8.75 cents to $6.75/bushel and March MWE wheat sank 5.75 to $6.5525.
Cattle futures sustained Thursday’s dramatic reversal. The recent breakdown in fed and feeder cattle prices seemed to run its course yesterday, with cattle and yearling prices rebounding drastically from early lows. Those gains continued today, thereby likely reflecting ideas that the breakdown was overdone and that the market was oversold. February live cattle jumped 1.47 cents to 160.00 cents/pound around midsession Friday, while April futures surged 1.27 cents to 159.47. January feeder cattle futures leapt 2.65 cents to 219.72 cents/pound and March feeders spiked 3.77 cents to 217.55.
Seasonal weakness may be weighing on hogs. Hog futures rebounded in concert with cattle and feeders Thursday, but have proven much weaker today. One has to suspect that traders worry about sustained seasonal weakness through the holiday season, especially if the ham market suffers its usual breakdown after grocers complete their holiday buying. February hog futures slipped 0.30 cents to 81.57 cents/pound late Friday morning, while June hogs stumbled 0.42 cents to 90.45.
Cotton futures continue struggling against moving average resistance. The huge stock gains of the past two days investors had become more optimistic about the global economic outlook and apparel demand. Cotton futures responded rather well to the stock advance, but the nearby contracts again ended yesterday’s ICE trading session below chart their respective 40-day moving averages. That fact, along with concurrent grain and soy losses probably explain late-week cotton losses. March cotton futures dropped 0.36 cents to 60.46 cents/pound shortly before midday Friday, while the July contract sagged 0.46 to 61.64.