Corn bulls may 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 turned decidedly lower Thursday night. Corn futures followed wheat lower, thereby seeming to reflect bullish profit-taking in the wake of this week’s gains. March corn futures dropped 6.0 cents to $4.05/bushel early Friday morning, while July lost 6.0 to $4.2025.
Beans and meal also set back Thursday night. Renewed talk of demand strength has supported the soy complex this week, particularly with the stock indexes staging a powerful recovery from big losses earlier this week. Soyoil still seems hostage to developments in the crude and palm markets (and followed crude higher overnight), but beans and meal declined in concert with corn and wheat. January soybean futures slumped 6.0 cents to $10.29/bushel in early Friday action, while January soyoil gained 0.01 to 31.90 cents/pound, and January meal slid $2.2 to $363.1/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 rally has run its course. Of course, that might not be true in this case. March CBOT wheat tumbled 20.5 cents to $6.3475/bushel Thursday night, while March KC wheat fell 16.5 cents to $6.6725/bushel and March MWE wheat sank 14.75 to $6.4625.
Cattle futures posted a dramatic reversal Thursday. The recent breakdown in fed and feeder cattle prices seemed to run its course yesterday. Reports of another cash market dive Wednesday afternoon apparently matched industry expectations, thereby opening the door for a major short-covering rebound. Not only did live cattle futures bounce strongly, feeder futures came roaring back from limit down levels later in the day. A follow-through rise on today’s opening seems likely, despite continued beef slippage late yesterday. February live cattle leapt 2.70 cents to 158.52 cents/pound late in Thursday’s CME pit session, while April futures soared 2.65 cents to 158.20. January feeder cattle futures rallied 0.47 cents to 217.07 cents/pound and March feeders surged 1.52 cents to 213.77.
Limited spot market losses seemed to take the pressure off of hogs. Despite big cash and wholesale losses posted Wednesday afternoon, hog futures bounced on Thursday’s opening. Traders probably think recent CME losses, particularly those in the cattle and feeder pits, were overdone. Comparatively stable midday spot quotes proved also seemed to spur CME hog buying. Afternoon cash quotes remained weak, but pork values stabilized, which may cause a mixed opening. February hog futures vaulted 1.40 cents and ended Thursday at 81.87 cents/pound, while June hogs jumped 1.87 cents to 90.87.
Cotton futures are still struggling against moving average resistance. The hug stock gains of the past two days certainly seemed indicative of improved market ideas 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 just below chart their respective 40-day moving averages. That fact, along with concurrent grain and soy losses probably explain overnight cotton slippage. March cotton futures dipped 0.14 cents to 60.68 cents/pound just after sunrise Friday, while the July contract sagged 0.18 to 61.92.