Ag markets posted divergent reactions to Friday's USDA data

Corn futures reacted strongly to Friday's USDA data. Despite news of a sizeable U.S. corn sale this morning, corn futures remained under pressure ahead of the late-morning USDA reports. However, the data looked quite bullish for the yellow grain outlook, since the USDA cut its estimate of the 2013 U.S. crop and posted stock totals well below forecasts. March corn futures jumped 20.75 cents to $4.3275/bushel at Friday's close, while May soared 20.5 to $4.4075/bushel.

The USDA reports partially sustained early soybean and meal gains. Talk of vigorous demand reportedly boosted beans and meal through early Friday morning trading. The USDA reports were generally seen as supportive for the soy complex, because the USDA stated December bean stocks slightly below expectations. Other numbers were less friendly, so CBOT prices set back from early highs. March soybeans settled 4.75 cents higher at $12.785/bushel Friday afternoon, while March soyoil bounced 0.27 cents to 38.23 cents/pound, but March soymeal dipped $0.7 to $413.6/ton.

The wheat markets traded poorly after the USDA reports. Early-Friday news of Taiwanese and Venezuela buying supported wheat futures. Major premiums for high-protein spring wheat in Minneapolis also supported that market. However, prices dove after the USDA released its latest reports, since the December stocks total and the 2013/14 carryout figure topped expectations. March CBOT wheat futures tumbled 15.25 cents to $5.69/bushel in late Friday action, while March KCBT wheat futures fell 13.0 cents to $6.26, and March MWE futures dropped 8.75 to $6.205.

Record prices are supported cattle futures Friday. After proving surprisingly weak Thursday, the cattle market seemed set to resume its late-2013 rally Friday. Beef cutout values jumped to record highs Thursday afternoon and were followed to a fresh all-time peak by the cash markets as the work week concluded. This seems to bode well for next week's trading. February cattle futures climbed 0.15 cents to 136.70 cents/pound at their Friday settlement, and April futures gained 0.10 to 137.35. Meanwhile, March feeder cattle futures reversed downward by 1.17 cents to 167.65 cents/pound, and May sank 1.02 to 168.90.

Hog futures also moved up Friday. Ideas that the hog market is set for a technical and seasonal rally apparently supported CME hog prices as the week's trading ended. Thursday's late wholesale strength and mixed-to-firm cash quotes may have encouraged bulls looking for a surge into mid-February. Record cattle and beef prices probably helped the bullish cause as well. February hogs advanced 0.57 cents to 85.82 cents/pound as CME pit trading ended Friday, while June rose 0.30 to 100.90.


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