Grain, soy futures easily outperformed livestock & cotton Friday

The grain markets followed soybeans higher Friday. Little fresh news concerning corn emerged Friday, although strong export demand was rumored. Still, 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 closed up 5.25 cents at $3.95/bushel Friday afternoon, while July gained 5.25 to $4.10.

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 25.5 cents to $10.36/bushel at Friday’s CBOT close, while January soyoil rallied 0.38 cents to 32.08 cents/pound, and January meal ran up $8.6 to $366.2/ton.

Wheat futures rallied in soybeans’ wake as well. Wheat traders also lacked for fresh news today, so they were apparently 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 were unable to force the expiring December CBOT contract substantially below the $6.00 level suggests considerable underlying support. March CBOT wheat rose 4.25 cents to $5.94/bushel in closing Friday action, while March KC wheat moved up 3.75 cents to $6.3925/bushel and March MWE wheat climbed 4.5 cents to $6.23.

Cash losses extended this week’s CME cattle decline. Tumbling beef quotes apparently weighed heavily upon live cattle futures this week, since traders worried that the weakness would undercut the cash markets. That’s exactly what happened, so futures remained under downward pressure throughout Friday’s session. February live cattle dove 2.10 cents to 164.82 cents/pound at their Friday settlement, while April plunged 2.15 to 164.30. January feeder cattle futures fell 1.07 cents to 234.87 cents/pound and March feeders dropped 0.82 to 231.22.

CME hogs posted sizeable losses as well. Despite the fact that pork values rallied significantly Thursday afternoon, 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. Selling may have spilled over from the cattle markets. February hog futures tumbled 1.00 cent to 85.62 cents/pound in late Friday trading, while June hogs sank 1.70 cents to 92.80.

Cotton futures set back Friday. No fresh news concerning cotton emerged Friday, 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 ended the week having slumped 0.78 cents to 59.64 cents/pound, while the July contract drooped 0.79 to 61.23.