EPA news affected the crop markets Friday. Corn continued recovering from fresh 2015 lows Thursday night, with pragmatic and technical buying before the weekend seeming to power gains. However, the EPA released its long-awaited interpretations of Congress’s “Renewable Fuels Mandate” at midmorning; those were seen as being somewhat bearish for corn, which pushed prices modestly lower. July corn futures settled 2.0 cents lower at $3.515/bushel Friday afternoon, while December lost 2.0 to $3.68.
The soy complex traded higher today driven mainly by the EPA’s 2015 target for biodiesel being set at 1.7 billion gallons, up from 1.28 billion in their 2013 proposal. As well, today’s soy export sales report suggested a robust demand picture for soybeans with trade estimates for soybeans for 2014-2015 at 332,400 MT, up from the 100,000-300,000 estimate. News reports indicating a conciliatory attitude among leaders of Argentine workers disrupting that countries soy transport and processing industries seemed rather negative for the short-term U.S. outlook, while the domestic industry’s handle on the current plantings situation seems rather tenuous. Soyoil saw support with July futures closing up 1.27 cents to 33.33 cents/pound. July soybean futures ended Friday up 8 cents closing at $9.34/bushel and July meal ended up $.90, closing at $305.70/ton.
Drying forecasts and export pessimism weighed on the wheat markets. The latest weather forecasts for the southern Plains point to drier and warmer conditions, thereby implying improving growth for winter wheat in the region. Wheat futures reacted negatively and seemed to accelerate lower. Ideas that U.S. grain remains uncompetitive on the global market apparently spurred additional selling. July CBOT wheat futures fell 11.75 cents to $4.77/bushel at Friday’s close, while July KC wheat dropped 11.5 cents to $4.9875/bushel, and July MWE wheat tanked 16.25 to $5.3075.
Huge wholesale losses undercut cattle futures Friday. The cattle market threatened to break out to the upside Thursday, but failed to do so. That may have set the stage for a sharp bearish reaction to today’s midsession beef news, which indicated major losses in cutout values. June live cattle futures ended Friday having sunk 1.17 to 152.32 cents/pound, while August cattle dove 1.47 to 151.27. Meanwhile, August feeder cattle futures plunged 2.0 cents to 222.95 cents/pound, and November feeders dropped 0.90 to 219.37.
Hog futures followed cattle lower. Pork quotes fell sharply Thursday afternoon, but that triggered only a modest response in early Friday trading. Conversely, the midday breakdown suffered by beef prices and the CME cattle reaction apparently spurred more aggressive hog selling. Midsession pork gains were apparently offset set by slippage in the country hog markets. June hog futures fell 0.77 cents to 83.82 cents/pound in late Friday trading, while December tumbled 0.87 to 69.22.
Cotton futures couldn’t sustain big Friday morning gains. The weekly USDA Export Sales report stated last week’s cotton results far above recent levels, thereby encouraging ICE market bulls. Having the news come on the heels of Thursday’s strong technical rebound probably exaggerated the reaction. However, bulls couldn’t sustain the move, possibly due to ideas that Thursday’s rally had anticipated the USDA data. July cotton ended the week having risen just 0.02 cents to 64.35 cents/pound, while December futures slumped 0.42 to 64.64.