Weather concerns and volatile world financial markets helped corn higher overnight. Talk of an early frost or a significant yield revision in the September WASDE has investors turning opportunistic. China’s stock market rallied 4.9% Friday, while U.S. index futures are lower early Friday with Dow futures down .97%, S&P futures down .85% and NASDAQ futures down .77%, suggesting yesterday’s rally may be shortlived. The International Grains Council increased its 2015/16 world corn crop by 2 million tonnes to 968 million. September corn futures were 1.75 cents higher to $3.655/bushel early Friday, while December gained 1.5 cents to $3.765.
China’s stock market rally by nearly 5% Friday gave the soy complex a boost overnight. Some talk of weather may also be adding support as traders express some concerns about dryness impacting final yields. On the other hand, many see the drier outlook as positive for maturation. New export sales are picking up pace ahead of Q4, what is hoped to be a big buying month for China. Nearby ICE Brent Crude Oil is down 1% to 47.09 and the U.S. Dollar index is down .06 to 95.55. September futures gained 5.75 cents to $8.92/bushel Friday, while September soyoil climbed .31 cents to 27.20 cents/pound and September meal was higher by $0.9 to $323.80/ton.
Despite a mostly bearish outlook, wheat futures were neutral-higher early Friday morning. The International Grains Council raises the world forecast for 2015/16 wheat by 10 million tonnes to 720 million mostly on the improved outlook in Russia, Ukraine, and the EU. SovEcon raised its 2015 Russian wheat forecast by 2 million tonnes to 101 million. September CBOT wheat futures lost 5.5 cents to $4.8425/bushel Thursday, while Sep KC wheat fell 2 cents to $4.645/bushel, and September MWE dropped 1.75 cents to $4.945.
The stock market recovery helped cattle futures higher Thursday. Beef prices were mixed at midday with choice .58 higher to 244.82 and select .07 higher to 233.53. Prices are expected to work higher through the fall and winter but corrections along the way are not out of the question. December cattle futures tested February lows which may be supportive to an oversold market. October cattle gained 2.175 cents to 142.55 cents/pound Thursday, while December cattle were 2.17 cents higher to 144.85.
CME hogs futures settled lower Thursday after surging in recent days in the face of the stock market breakdown. Smithfield foods reported its U.S. exports to China surged 45% during the first half of 2015. The October hog contract eased .25 cents, yet strength in the lean hog index, which is posted 12 cents higher than October hogs at 78.79, suggests futures may still see support in coming days. The sharp fall in demand for pork may be at the door step but it may take a few more days to confirm this reversal. Cash hog values were lower by 1.09 cents to 72.58. October hog futures lost .225 cents to 67.775 cents/pound Thursday, while February slid 0.60 cents to 66.025.
The rebound in Chinese stocks Friday surprisingly did not help cotton futures overnight, presumably due to technical and end of week consolidation by funds. The tighter than expected balance sheet for cotton and the drop in the condition rating have given cotton bulls something to talk about as of late but world market problems are now the driver. While the global scene for cotton is largely still plagued by oversupply, the recent bullish data appears to be giving way to world economic and currency struggles, particularly related to Chinese demand fears. December cotton futures lost .07 cents to 63.28 cents/pound Friday, while May fell 0.18 cents to 63.82.