Ag markets diverged Friday morning

The grain markets followed soybeans higher Friday morning. Little fresh news concerning corn has emerged this morning, but grain market bulls were clearly encouraged by the big soybean sale announced this morning. The strong U.S. Employment report was also encouraging, but the fact that it sent the dollar to fresh five-year highs may have limited gains. March corn futures gained4.5 cents to $3.9425/bushel late Friday morning, while July bounced 4.5 to $4.0925.

Strong export news boosted the soy complex. The USDA’s daily export reporting system indicated that 240,000 tonnes of U.S. beans were sold to an unknown destination yesterday. As one would expect, that sent bean and product prices higher, since it implies that foreign demand for U.S. soy remains quite robust. January soybean futures jumped 21.0 cents to $10.315/bushel around midsession Friday, while January soyoil rallied 0.29 cents to 31.99 cents/pound, and January meal added $8.9 to $366.7/ton.

Wheat futures also rallied in soybeans’ wake. Wheat traders also lacked for fresh news this morning, so they were happy to buy as the soy markets led the way higher. The global wheat situation still seems less than promising, but the fact that bears haven’t been able to force the expiring December CBOT contract substantially below the $6.00 level suggests considerable underlying support. March CBOT wheat rose 4.5 cents to $5.9425/bushel in late Friday morning action, while March KC wheat surged 7.75 cents to $6.4325/bushel and March MWE wheat climbed 7.75 cents to $6.2625.

Cash losses are extending this week’s CME cattle decline. Tumbling beef quotes have apparently weighed heavily upon live cattle futures this week, since traders worried that the weakness would undercut the cash markets. That’s exactly what has happened, so futures have remained under downward pressure this morning. February live cattle fell 1.25 cents to 165.72 cents/pound around lunchtime Friday, while April dropped 1.00 to 165.45. January feeder cattle futures edged down 0.07 cents to 235.87 cents/pound and March feeders slid 0.35 to 231.70.

CME hogs remain under pressure. Despite the fact that pork values posted sizeable Thursday-afternoon gains, Chicago traders seemed to worry more about concurrent cash losses. The fact that most cash and wholesale quotes were higher at midsession seemingly did little to encourage them either. February hog futures tumbled 0.77 cents to 85.85 cents/pound late Friday morning, while June hogs lost 0.67 cents to 93.82.

Cotton futures set back Friday morning. No fresh news concerning cotton emerged Friday morning, which may have rendered the market vulnerable to pre-weekend position squaring. One could easily have assumed the good U.S. Employment news and the positive equity market reaction would boost prices, but traders may have been paying more attention to the U.S. dollar at fresh five-year highs (which may hurt cotton export prospects). March cotton futures slumped 0.49 cents to 59.93 cents/pound shortly after noon (EST) Friday, while the July contract stumbled 0.42 to 61.60.