Grain, livestock markets could prove volatile on Monday

Corn traders were apparently ambivalent Thursday night about the likely outcome of the weekly Export Sales reports released this morning. The data seemingly favored bears, since the actual sales total, at 189,700 tonnes fell short of industry forecasts in the 200,000-450,000 tonne range. Sellers could sustain only a portion of the downward pressure that arose in the immediate wake of the news, but proved able to force the market moderately lower Friday afternoon. We suspect the latest update of the weather models seemed to confirm rainfall potential over Argentine growing areas next week, which would help explain the late corn slide. However, technicians seemingly supported the nearby March future above its 40-day moving average (MA), thereby keeping the possibility of short-term gains very much alive. March corn ended the week having slipped 2 3/4 cents to $7.20 3/4, while December edged 1 1/4 cent lower to $5.83/bushel.

The Friday morning Export Sales report proved supportive of soybean futures, since the USDA soybean result, at 978,200 tonnes, topped predictions ranging from 750,000 to 950,000 tonnes. Moreover, weekly soymeal exports proved comparatively large. These suggest underlying demand for U.S. products remains strong despite the looming onset of the South American harvest and the likely bearish effect that could have on spot values around the globe. Wire service sources also cited firm Gulf Coast prices for a portion of the rise. On the other hand, the weather models continue implying significant Argentine rainfall next week, which may explain the losses suffered by deferred contracts across the soy complex. March beans rose 8 1/4 cents to $14.43 1/2 per bushel Friday, while March soyoil slipped 0.01 cent to 52.10 cents/pound and March meal gained $1.5 to $416.4/ton.

Wheat futures posted a surprisingly weak reaction to the weekly Export Sales data released Friday morning, but had risen substantially by the end of the day. Industry forecasts ranged between 350,000 and 550,000 tonnes, so the stated USDA figure, at 647,500 tonnes, seemed quite supportive. Some aggressive traders may have been anticipating a larger result, which might explain the quick post-report drop; but the subsequent rally certainly suggests most were pleased with it. The ongoing lack of rainfall predicted for the Southern Plains may also have boosted the market at the weekly close. March CBOT futures surged 8 cents to $7.76 1/2 as trading ceased Friday afternoon, while March KCBT wheat climbed 7 cents to $8.28 1/2 and March MGE futures spiked 10 1/4 cents to $8.65/bushel.

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