Ag markets partially reversed their Thursday moves overnight

The crop markets set back from Thursday's gains overnight. There was little fresh news and weather forecasts had not changed substantially. The idea that the forthcoming corn crop will likely be extremely large despite short-term weather events probably discouraged some, whereas technicians seemed to react to the September contract's failure to top its 20-day moving average. September corn sank 4.75 cents to $4.7675/bushel early Friday morning, while December dipped 4.5 cents to $4.6775.

The soy complex also turned downward Friday morning. The forthcoming soybean crop remains vulnerable to damage from heat and dryness later this month, but that fact apparently did little to prevent the overnight slide. The losses seemed rather egregious when viewed in light of fresh palm oil gains and the support they provided for oil values. As with corn, failure at technical resistance seemingly prompted the selling. September soybeans slipped 0.25 cent to $12.88/bushel just after dawn Friday, while November beans fell 5.75 to $12.5975. September soyoil slid 0.01 cents to 43.11 cents/pound, and September soymeal skidded $0.9 to $408.9/ton.

The wheat markets followed corn and beans again in overnight action. As in the corn and bean pits, there seemed to be little news pertinent to the U.S. wheat situation Thursday night, so it wasn't terribly surprising to see golden grain values sink as well. Short-term chart resistance also seemed to be a factor. September CBOT wheat inched 2.0 cents lower to $6.355/bushel in early Friday trading, while September KCBT wheat declined 3.0 cents to $7.00, and September MGE futures lost 1.25 cents to $7.3825.

Cattle futures posted moderate gains Thursday night. Bulls are probably more confident about the outcome of this week's cash trading at this point, especially after the Thursday afternoon wholesale report built upon the surge posted Wednesday. October cattle futures rose 0.2 cents to 128.30 cents/pound early Friday morning, while December gained 0.15 cents to 130.02. September feeder cattle bounced 0.32 cents to 157.40 cents/pound, but November sagged 0.07 cents to 159.95.

Lean hog futures were narrowly mixed in overnight action. Hog traders are very likely uncertain about their positions after Thursday's wholesale action. That is, pork belly prices dove Thursday morning, which probably sparked the CME swine decline. The bacon price drop was reversed later in the day, but bulls have to worry that the morning break was a sign of things to come. October hog futures edged up 0.07 cents to 87.37 cents/pound as trading accelerated early Friday, while December was steady at 84.02.

The cotton market seemingly resumed its recent rally Friday morning. As with the grains, there was no particularly fresh news, although bulls may be responding to forecasts for another big round of rains over sodden fields in the Southeast. Prospects for an equity bounce may also have encouraged buying. December cotton futures surged 0.71 cents to 92.50 just after sunrise Friday, while March climbed 0.82 cents to 89.78.


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