Ag markets ended the week in decidedly mixed fashion
BBJ Market Report
Large supplies again weighed on the crop markets. Corn futures stabilized Thursday night in the wake of the bearish USDA reports and subsequent price drops to fresh lows. However, prices subsequently weakened in Friday trading, despite early morning news of a sizeable corn sale to an unknown destination. December corn futures settled down 2.5 cents to $3.385/bushel Friday, while May sank 2.5 to $3.595.
Vegoil gains may have supported bean and meal prices Friday. Thursday’s reports were also bearish for the soy outlook, thereby undercutting CBOT futures. Beans bounced later that day and continued rising in early Friday action in apparent response to the concurrent palm oil surge. Soyoil futures led the way higher, with beans inching up and meal declining only slightly despite another sizeable sales announcement. November soybean futures gained 3.75 cents to $9.8525/bushel at Friday’s close, while October soyoil soared 1.05 cents to 32.55 cents/pound, and October soymeal skidded $0.3 to $338.5/ton.
The wheat markets remain quite weak. Thursday’s crop reports also held generally bearish implications for wheat values. The domestic situation doesn’t seem that bad, but current U.S. prices are above those quoted on the glutted global market. That implies weak export demand, along with feed market competition from the depressed corn market. December CBOT wheat tumbled 7.0 cents to $5.025/bushel as Friday’s session ended, while December KC wheat fell 13.0 cents to $5.9325/bushel, and December MWE wheat dove 14.75 to $5.78.
Beef losses apparently weighed on cattle futures. This week’s technical failure and growing cash market pessimism seemed to spark Thursday’s drop in cattle futures. Prices firmed in early trading, but moved lower as the session passed; that probably reflected the sizeable beef losses posted at midday. October live cattle futures dropped 1.10 cents to 156.27 cents/pound in late Friday action, while December futures slumped 0.45 to 159.25. However, October feeder futures bounced 0.32 cents to 225.92 cents/pound, while January feeders lost 0.20 to 217.77.
Hog futures struggled amidst mixed spot market signals Friday. Seasonal price optimism powered recent gains in hog futures. But cash and wholesale prices turned decidedly mixed later in the week, thereby undermining the bullish bias built into nearby CME futures. October hogs ended the week having fallen 0.67 cents to 105.70 cents/pound, while December dove 0.90 to 96.30.
Cotton futures ended the week on a mixed note. Recent gains suggest ICE cotton traders had anticipated the tighter U.S. supply implied by Thursday’s USDA reports, although the news of surprisingly weak exports likely mitigated the bullish impact. The market rose again Friday morning, but the position-squaring likely undercut the most-active December contract at the weekly close. December cotton futures closed 0.09 cents lower at 68.00 cents/pound Friday, while March futures ran up 0.47 cents to 67.43.
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