Grain and soy markets seem set to rally Friday morning

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Corn futures rose moderately Thursday despite weak results on the weekly Export Sales report, then moved upward again overnight. Wire services credited the persistent rainfall over the Corn Belt experienced recently for the rise, since the moisture has kept planters out of the fields. That may be lowering harvest prospects and causing some acreage to shift to soybeans. May corn surged 4.5 cents to $6.5575/bushel in early Friday morning trading, while December climbed 3.75 cents to $5.4775.

South American news seemingly boosted the soybean complex overnight. Bolsa of Buenos Aires indicated late Thursday afternoon that the Argentine harvest is 24% complete and stuck with its harvest forecast of 48.5 million tonnes. That is 3.0 million below the USDA figure. Brazilian officials also discussed their efforts to avoid a 1-day dockworkers strike next Thursday. This reminded traders that they still have logistical problems getting their bean crop to the international market. May soybeans advanced 8.0 cents to $14.10/bushel Thursday night, while May soyoil was unchanged at 49.77 cents/pound, and May meal rose $3.0 to $398.0/ton.

Having the USDA confirm recent talk that China had made some major purchases of U.S. wheat recently supported the various markets Thursday, as did the result of the weekly Export Sales report. But the issue coming to the fore at this time is the frost damage recently done to the winter wheat crop. If potential yields were reduced substantially, the Kansas City market could lead the wheat complex upward. May CBOT wheat futures jumped 7.0 cents to $7.0475/bushel in pre-dawn Friday trading, while May KCBT wheat gained 4.0 cents to $7.4275, and May MGE futures added 5.25 cents to $7.9475.

Cattle futures were generally weak overnight after having rallied Thursday. The most likely cause for the slippage stemmed from the afternoon wholesale report, which indicated that beef cutout values had fallen rather significantly. This probably reminded traders that they could see much more wholesale, and possibly cash, weakness during the second half of April, especially if fed cattle supplies follow their traditional pattern of increasing seasonally. June cattle dipped 0.05 cents to 120.60 cents/pound in overnight trading, while December slid 0.27 cents to 126.55. May feeder cattle futures lost 0.82 cents to 140.95 cents/pound early Friday, and August sank 0.85 cents to 147.97.

Having wholesale pork prices rise for the third straight day Thursday seemed to support CME lean hog futures overnight. The April contract cash-settles at noon today, which means the lightly traded May future will take over as the nearby contract at a sizeable premium to the CME lean hog index. That may tend to weigh upon futures, especially since the summer contracts are trading at even higher levels. May hog futures edged 0.10 cents lower to 87.30 cents/pound early Friday morning, while the June contract dipped 0.07 cents to 89.37.

Cotton futures proved unable to sustain rally attempts Wednesday night and Thursday morning and later turned decidedly lower. The apparent failure in a test of overhead May futures resistance around its 40-day moving average seemingly triggered the sell-off. There was little overnight news, which probably rendered the market vulnerable to sustained selling. May cotton skidded 0.16 cents to 84.50 cents/pound in early Friday morning electronic action, while December slipped 0.23 cents to 85.43.



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