Cotton, soyoil diverged from general ag strength Thursday night

Traders seemed to focus on reduced Chinese production Thursday night. The private crop tour of the Midwest yielded huge production forecasts yesterday, but CBOT prices inched upward again overnight. That probably reflects news that drought in northeastern China could chop 3.5 million tonnes from that nation's harvest. September corn edged up 1.75 cents to $3.64/bushel in early Friday action, while December added 1.0 to $3.70.

Talk of demand strength continues supporting beans and meal. The ongoing crop tour is also pointing to a huge fall soybean harvest, thereby keeping persistent pressure upon new crop futures. However, the expiring September bean and meal contracts are leading those markets higher in the face of the bearish supply outlook. Oil is still suffering from the global vegoil glut. September soybean futures jumped 16.75 cents to $11.53/bushel Thursday night, while November futures advanced 5.0 cents to $10.4325. September soyoil skidded 0.13 cents to 32.65 cents/pound, and September soymeal surged $10.0 to $423.8/ton.

Reduced Canadian production is apparently supporting wheat prices. The global wheat situation still looks well supplied, but Thursday's modest reduction in Canadian production forecasts alleviated the pressure somewhat. The underlying strength of global protein demand may also be encouraging bulls. Major moving average resistance may limit upside potential. September CBOT wheat gained 3.25 cents to $5.495/bushel early Friday morning, while September KC wheat lifted 4.75 cents to $6.2675/bushel, and September MWE wheat moved up 4.25 to $6.20.

Cattle futures are trading mixed again Friday morning. Midweek news of cash and wholesale weakness weighed upon cattle futures, but the Chicago market seemed to stabilize yesterday. That was again the case last night, with most-active October futures edging higher and most other contracts suffering modest losses. Traders rather obviously worry about a resumption of the recent downtrend next week. October live cattle futures rose 0.20 cents to 145.75 cents/pound as Friday dawned over Chicago, while December futures slipped 0.10 to 148.50. Meanwhile, September feeder futures inched up 0.07 cents to 209.50 and November futures climbed 0.15 to 207.50.

Hog traders suspect futures hit late-summer lows yesterday. The cash hog and wholesale markets posted moderate losses again Thursday, thereby continuing the recent breakdown. However, traders viewed the action posted CME pit as likely signaling a reversal, and bought rather aggressively last night as a result. October hogs rallied 0.65 cents to 94.27 cents/pound early Friday morning, while December ran up 0.55 to 88.10.

Cotton futures remained weak Thursday night. Thursday's cotton export figure seemed to disappoint ICE traders, but the fact that the most-active December future failed at major moving average resistance also played a big role in the subsequent decline. The slide continued amidst a lack of news overnight. December cotton dipped 0.40 cents to 65.52 cents/pound shortly after sunrise Friday, while March futures slumped 0.31 cents to 66.11.


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