Corn seemed to follow soybeans and wheat higher Thursday night. One overnight story indicated South Africa was importing Argentine corn, which seemed like a bullish development (since South Africa is a traditional exporter). CBOT futures traded weakly in the early morning hours, but followed beans and wheat higher as dawn approached. May corn futures stalled at $3.735/bushel early Friday morning, while December inched up 0.25 to $3.9925.
Soybeans and meal posted modest gains. The flood of soybeans and products coming out of South America are exerting persistent pressure upon prices at this point, with soyoil also suffering from weakness spilling over from the crude and palm oil markets. Conversely, beans and meal proved surprisingly firm overnight. We’re inclined to credit vigorous underlying demand, as well as slow U.S. producer selling at this juncture. May soybean futures edged up 1.0 cent to $9.6275/bushel Thursday night, while May soyoil fell 0.27 cents to 30.35 cents/pound, and May meal lifted $2.0 to $321.3/ton.
Weather forecasts boosted the wheat markets. Wheat futures have traded firmly lately based on industry concerns about growing dryness in the U.S. southern Plains and in the Black Sea region. The latest weather forecasts implied dryness in HRW wheat areas one-two weeks forward, thereby encouraging bullish traders once again. May CBOT wheat rose 3.0 cents to $5.15/bushel in early Friday action, while May KC wheat added 5.0 cents to $5.5525/bushel, and May MWE wheat rallied 4.5 to $5.7725.
Cattle futures seemingly posted a bullish breakout Thursday. Nearby cattle futures opened strongly in the wake of Wednesday’s limit-up move, struggled through midsession, then closed substantially higher. Firm beef quotes, and anticipation of cash gains, appeared to push Chicago prices higher. Afternoon GLOBEX slippage suggested a weak Friday morning opening. April cattle futures ended Thursday having jumped 1.42 cents to 158.00 cents/pound, while August cattle surged 1.12 cents to 147.52 cents/pound. Meanwhile, April feeder cattle futures leapt 1.72 cents to 216.02 cents/pound and August feeders soared 2.12 to 216.50.
Nearby hog futures fell to fresh lows. Pessimism about the supply/demand outlook apparently weighed heavily upon CME hogs again Thursday. Bearish technical traders apparently anticipated a significant follow-through to the downside as well, despite current cash premiums. Afternoon pork quotes were mixed, while cash losses were minimal. A flat opening seems likely. April hog futures plunged 2.57 cents to 58.12 cents/pound at Thursday’s CME close, while June hogs sank 0.60 to 74.52.
Cotton futures proved surprisingly weak last night. Thursday’s Export Sales report appeared quite supportive of the cotton outlook, since the indicated total easily topped recent rates. It would have been easy to look for more of the same overnight, since stock index futures bounced and the U.S. dollar dipped (both of which are ostensibly supportive of apparel demand). One has to suspect traders are taking pre-weekend profits in the wake of the big Wednesday-Thursday surge. May cotton sagged 0.26 cents to 62.69 cents/pound just after sunrise Friday, while December futures dropped 0.40 to 63.71.