Corn futures were firmer in the overnight session approaching the end of the week. End-of-month consolidating by the funds is also likely to occur today as investors lift their eyes to August and to the Supply/Demand report due out on the 12th. Although extreme heat has been largely absent in the Corn Belt, there was some talk yesterday of a “flash drought” in scattered pockets that are starting to dry. Cash grain basis bids have firmed as export demand is seen stronger, highlighted by the higher-than-expected new-crop export sales data released yesterday. September corn futures gained 4 cents to $3.7725/bushel early Friday morning, while December lifted 4 cents to $3.8775.
Soybeans firmed in early Friday trading ahead a day likely to be filled with end-of-month positioning. It’s worth repeating that yesterday, in the USDA daily system, China was also reported to be the buyer of 300,000 tonnes of old-crop beans, a highly bullish and surprising occurrence. The Soyfoods Association stated yesterday that food processors may shift to soy based products to replace eggs in response to price increases related to the Avian Flu outbreak that resulted in the loss of 47 million birds this year. The EIA will release biodiesel production data on today and USDA Fats and Oils report will be out on Monday. August soybeans gained 3.75 cents to $9.94/bushel at dawn Friday, while August soyoil lost 0.11 cents to 30.17 cents/pound and August meal rose $1.9 to $359/ton.
Wheat futures traded higher in the overnight session, recouping some of yesterday’s losses. Lower wheat prices are becoming an attractive feed option for cattle producers while wheat producers are feeling the pain as prices are hitting lows. Reports from Kansas are finding higher yields than expected consider the amount of rain this year. The supply outlook for U.S. and World wheat remains high, which, when combined with less than optimal U.S. wheat exports, puts pressure on prices. September CBOT wheat futures gained 4.5 cents to $5.01/bushel early Friday morning, while SepKC wheat lifted 5 cents to $4.96/bushel, and September MWE gained 4.5 cents $5.3125.
Live cattle futures traded mixed Thursday with the nearby up a bit and the deferred months a little lower. Prices held within a narrow range as the trade continues to monitor signs that demand is picking up. Beef cutouts rose today after steeply declining in recent weeks with choice up .72 to 233.34 cent/pound and select up .25 to 229.32. August cattle gained .32cents to 145.22 cents/pound, while December futures fell .22 cents to 147.90. Meanwhile, August feeder cattle futures lost .02 cents to 211.22 cents/pound at the close Thursday, while November feeders dropped .22 to 205.12.
Hog futures slipped lower Thursday after testing the 80 cent level yesterday. Nearby hogs traded 5 cents above the 100-day moving average of 74.09. The August contract has risen steadily in recent weeks after bottoming on July 13 at 73.95 cents/pound. One factor behind recent rises in hog futures may be attributed to lower pig weight not uncommonly associated with hot summer weather suppressing hog appetites. Traders still await the demand surge that is typical for the first week of August, ahead of Labor day buying. . August hog futures closed 0.35 cents lower at 79.67 cents/pound Thursday, while December stayed neutral at 61.95.
The cotton market weakened early Friday for third consecutive session. The ICE futures remain in a narrow trading range. Economic activity in China largely remains the focus for cotton traders as they are not only the world’s largest cotton grower but are also the world’s largest cotton consumer and cotton importer. Recent fragility in China’s equity markets is helping to keep downside pressure on the trade, as if their supply problems weren’t problem enough. December cotton futures dropped .10 cents to 63.45 cents/pound Thursday, while May lost 0.26 cents to63.60.