Ag markets diverged significantly going into the weekend

Corn futures turned lower Friday. Ideas that the U.S. harvest is ending and talk of improving export demand seem to be supporting corn futures. The result of the weekly Export Sales report also seemed supportive. However, weakness spilling over from big soybean losses and news that the EPA had formally proposed cutting the 2014 ethanol mandate dragged prices lower into the close. December corn futures ended the week 4.5 cents lower at $4.22/bushel, while May declined 6.5 to $4.385.

A forecast acreage increase sent soybean prices tumbling. Although CBOT traders were encouraged by talk of improving demand from China, recent rainfall over Brazil and Argentina boosted production prospects in those countries, which could weigh heavily upon prices next year. A forecast of increased 2014 US soybean plantings from a respected industry analysis firm added to the downward pressure. January soybean futures dove 31.75 cents to $12.6575/bushel at Friday's close, while December soyoil sank 0.50 cents to 40.47 cents/pound, and December soymeal plunged $14.1 to $410.5/ton.

The wheat markets followed corn and beans lower Friday. Although word of improving international demand at current prices is encouraging wheat market bulls, they proved unable to overcome selling spilling over from the corn and soy complexes. When combined with the low sales total on the weekly Export Sales report, it wasn't terribly surprising to see wheat futures decline modestly. December CBOT wheat futures slipped 0.25 cent to $6.445/bushel in late Friday trading, while December KCBT wheat futures slumped 4.75 cents to $6.9825, while December MWE futures slid 3.25 to $6.9675.

Cash strength boosted cattle futures Friday afternoon. Wholesale beef prices have moved inconsistently this week, but cattle futures remained generally firm as traders anticipated cash gains before the weekend. Those expectations were met around noon Friday (with trading around $132/cwt), which very likely boosted futures somewhat into the close. December cattle futures settled 0.42 cents higher at 133.40 cents/pound in late Friday trading, while April futures rose 0.07 to 135.02. Meanwhile, January feeder cattle ran up 0.62 cents to 165.82 cents/pound, and March feeders lifted 0.55 cents to 165.45.

Tight hog supplies seemed to support hog futures. Cash hog and wholesale pork quotes declined at midsession Friday, but that seemingly did little to deter CME bulls. Today's rise probably reflected industry optimism. That probably reflected talk that this week's slaughter total would once again fall below the comparable year-ago rate, thereby implying persistently tight supplies. December hog futures gained 0.30 cents to 85.90 cents/pound at their Friday close, while April added 0.35 to 92.45.


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