Ongoing rainfall and forecasts for more of the same seemed to provide persistent support for the grain markets Thursday night. The latest weather models imply significant rainfall for much of the central U.S. next week. While that might be seen as boosting corn production prospects, the damage potentially being done to the winter wheat crops seemed to be the overriding factor for grain traders. July corn edged up 0.75 cent to $3.6425/bushel early Friday morning, and December added 0.5 to $3.815.
Soybean and meal futures are apparently bumping up against technical resistance associated with their respective 20-day moving averages. However, traders may be confused as to the impact of short-term rainfall. That is, it’s almost surely delaying some planting, but it may be boosting the productive potential of that already in the ground. Soyoil seemed to follow Asian palm prices higher. July soybean futures sagged 2.25 cents to $9.4425/bushel Thursday night, while July soyoil rallied 0.15 cents to 34.68 cents/pound, and July meal skidded $0.8 to $304.9/ton.
Weather forecasts continue supporting wheat futures, with talk of persistent mid-June rainfall into the Delta region, Illinois and across the Plains boosting fears of crop damage. The winter wheat markets built on their big Thursday gains, while spring wheat quotes at Minneapolis inched higher in sympathy. July CBOT wheat futures gained 1.75 cents to $5.255/bushel shortly after sunrise Friday, while July KC wheat advanced 1.75 cents to $5.43/bushel, and July MWE wheat crept up 0.75 to $5.765.
Live cattle futures traded higher Thursday apparent midday beef firmness. That may reflect the onset of retailer buying for features Independence Day weekend. As usual, late-week CME action is heavily dependent upon Friday cash action, news concerning which has been minimal (also as usual). Late-afternoon GLOBEX action suggests a poor opening today. August cattle futures jumped 1.05 cents to 151.52 cents/pound as Thursday’s pit session ended, while December futures gained 0.625 cents to 154.34. Meanwhile, August feeder cattle futures ran up 0.85 cents to 222.75 cents/pound, and November feeders climbed 0.27 to 218.15.
Hog futures tanked again Thursday, thereby reflected persistent cash and wholesale weakness, as well as a follow-through technical breakdown. In contrast to the traditional early-summer rally, the market now appears to be anticipating low prices during summer. Mixed late-day spot quotes and looming July support at the 80.00 cent level may lead to a firm opening this morning. August hog futures plunged 1.92 cents to close at 79.57 cents/pound Thursday, while December dove 1.57 to 66.5.
Thursday’s financial market action may be weighing on cotton futures. Recent U.S. dollar losses have seemingly offered support for cotton futures, as traders relied on the cheaper greenback to make American cotton more attractive to export customers. However, the dollar staged a significant comeback as Thursday passed, whereas the stock indexes turned sharply lower. Neither move favors demand for apparel or cotton, which may explain bulls’ inability to sustain yesterday’s breakout attempt as well as the slippage seen overnight. July cotton tumbled 0.35 cents to 64.77 cents/pound in early Friday trading, and December futures slumped 0.32 to 64.96.