Livestock markets posted disparate reactions to the USDA data

Corn futures suffered a belated bearish reaction to Friday’s USDA data. Corn had declined in concert with soybeans prior to the release of today’s 11:00 AM CDT release of the USDA’s Crop Production and Supply/Demand (WASDE) reports. The data were construed as somewhat supportive since most numbers fell slightly below average forecasts, but CBOT corn futures turned decidedly lower as the noon hour loomed. December corn futures fell 6.25 cents to $3.385/bushel late Friday morning, while May slid 1.5 to $3.60.

The USDA numbers only temporarily boosted the bean and meal markets. CBOT traders were expecting huge production and supply numbers on today’s USDA reports, which is mostly what they got. However, the increases were not as large as many expected, thereby sparking rebounds in the bean and meal markets. Oil remained under pressure and was then joined by beans as bears returned with a vengeance. November soybean futures dropped 6.5 cents to $9.355/bushel as the lunch hour loomed Friday, while December soyoil sagged 0.40 cents to 32.61 cents/pound, and December soymeal edged up $1.1 to $314.6/ton.

The wheat markets built upon midmorning gains after the reports. Wheat futures slumped in concert with corn and soybeans Thursday night, but bounced prior to the reports. That strength reportedly reflected hopes for strong U.S. participation in a fresh Egyptian wheat tender. The reports sent the markets even higher, due in part to the fact that the forecast global carryout fell short of expectations. December CBOT wheat jumped 9.5 cents to $5.0275/bushel around midsession Friday, while December KC wheat surged 8.0 cents to $5.8025/bushel, and December MWE wheat climbed 9.25 to $5.6275.

Cash strength seemed to offer little help to bulls Friday morning. CME traders have been expecting fresh cash gains in the wake of the early-week jump in beef prices. Those expectations, along with recent stock market weakness, probably explain the poor reaction posted by deferred CME futures to this morning’s news of Nebraska cattle gains. December live cattle futures declined 0.95 cents to 164.92 cents/pound late Friday morning, while April futures dove 2.30 to 164.10. Meanwhile, November feeder futures plunged 2.95 cents to 238.57 cents/pound and January feeders plummeted 3.00 to 232.30.

Hog futures also declined Friday morning. Recent indications of lost upward momentum in cash hog and pork values probably set the stage for CME slippage. One has to suspect today’s insider talk of country conditions was less than bullish. December hogs tumbled 1.17 cents to 94.45 cents/pound in late Friday morning action, while April sank 0.72 to 91.27.

Cotton futures posted a mixed response to the USDA reports. Although the stock market remained weak Friday morning, cotton futures rebounded from Thursday’s big equity driven losses. December remained firm after the USDA data were released, since the numbers indicated a smaller production forecast than traders anticipated. But, March turned lower. December cotton futures advanced 0.57 cents to 64.51 cents/pound just after noon (EDT) Friday, while March futures slumped 0.25 cents to 62.02.