Financial markets sparked fresh crop market strength Friday morning. A report indicating traditional exporter South Africa is importing Argentine corn may have supported corn futures overnight, as did strength spilling over from the soy and wheat complexes. But the main driver of midmorning gains was almost surely concurrent stock market strength and big U.S. dollar losses, both of which are conducive to improved demand. May corn futures rallied 9.0 cents to $3.825/bushel just before lunchtime Friday, while December corn moved up 8.0 to $4.07.
The soy complex also turned unanimously higher. Soybeans and meal surged Friday morning despite the flood of soy currently coming out of South America. Big equity gains and a sharp hit to the value of the U.S. are very likely encouraging CBOT bulls. The broad commodity sector advance included the energy sector, which in turn spurred soyoil buying. Bulls also cite persistently strong meal demand. May soybean futures leapt 12.25 cents to $9.74/bushel late Friday morning, while May soyoil advanced 0.20 cents to 30.82 cents/pound, and May meal added $3.9 to $323.2/ton.
Weather forecasts also boosted the wheat markets. Today’s financial market moves are almost surely encouraging wheat bulls as well, especially with nearby futures overcoming intermediate-term moving-average resistance. Still, talk of growing dryness in the U.S. southern Plains and in the Black Sea region seems to be driving prices higher. May CBOT wheat jumped 13.75 cents to $5.2575/bushel around midsession Friday, while May KC wheat surged 13.75 cents to $5.64/bushel, and May MWE wheat gained 12.5 to $5.8525.
Cattle futures seemingly lost bullish momentum Friday morning. The cattle market appeared to stage a mid-week bullish breakout, with anticipation of fresh cash strength being the likely cause. Thus, one has to suspect morning country reports are not proving as promising as anticipated, since the nearby contracts clearly ran out of bullish momentum this morning. April cattle futures sagged 0.55 cents to 157.45 cents/pound as the lunch hour loomed Friday, while August cattle sank 0.55 cents to 146.97 cents/pound. Meanwhile, April feeder cattle futures fell 0.65 cents to 215.37 cents/pound and August feeders tumbled 1.32 to 215.17.
Hog futures couldn’t sustain early gains. Although the cash hog and wholesale pork markets remained weak Thursday, anticipation of seasonal strength apparently spurred sizeable gains after today’s CME opening. However, bulls also failed to sustain the upward momentum, with only the nearby April contract remaining higher on the day at midsession. Talk of huge supplies on next Friday’s quarterly report may have depressed prices. April hog futures edged 0.325cents higher to 58.37 cents/pound in late Friday morning trading, while June hogs skidded 0.42 to 74.10.
Cotton futures remain surprisingly weak. Thursday’s Export Sales report appeared helped the cotton market build upon Wednesday’s big surge and might easily have been seen as setting the stage for another advance along with the equity markets (amid U.s. dollar weakness) today. Nevertheless, ICE cotton declined overnight and remained weak through midsession. We strongly suspect bullish traders are taking profits before the weekend. May cotton slumped 0.05 cents to 62.90 cents/pound shortly before midday Friday, while December futures dropped 0.21 to 63.90.