Crop traders may be flattening positions. News that a South Korean firm completed a huge tender for grain and meal had limited effect since it was optionally sourced from other countries as well as the U.S. CONAB’s revisions of Brazil’s corn and soybean production estimates were small, which also reduced their market moving potential. Thus, U.S. traders seemed to be evening up positions ahead of Monday’s midday release of several major USDA reports. March corn futures rose 2.25 cents to $3.965/bushel Thursday night, while July added 2.0 to $4.115.
The soy complex proved mixed last night. CONAB slightly increased its Brazilian soybean production forecast, so it had limited impact on the markets. Meanwhile, the equity markets took a break from the midweek surge, while crude and palm oil prices slipped. Thus, the overnight soyoil slide wasn’t surprising. As in the grain markets, bean and meal traders are probably flattening positions prior to Monday’s big USDA reports. March soybean futures inched up 1.25 cents to $10.495/bushel early Friday morning, while March soyoil dipped 0.12 to 33.64 cents/pound, and March meal gained $0.6 to $347.8/ton.
Wheat futures continued Thursday’s decline. Little wheat news emerged overnight, so traders in those markets were probably adjusting their holdings ahead of Monday’s USDA reports as well. However, yesterday’s drop seemingly marked the start of fresh downward price leg, so persistent technical selling probably played a significant role in the overnight drop. March CBOT wheat slid 0.25 cents to $5.6675/bushel in pre-dawn Friday trading, while March KC wheat slumped 1.5 cents to $6.055/bushel, and March MWE wheat stumbled 2.5 to $6.06.
Fund selling reportedly sank cattle futures Thursday. Monthly export data revealed a disappointing beef figure, which partially explained Thursday morning cattle weakness. The nearby February contract dipped below its 100-day moving average, which reportedly triggered a cascade of fund selling. Feeder futures also fell. Late afternoon beef news was supportive and suggests a higher opening. February and April live cattle futures ended Thursday having plunged the 3.00-cent daily limit to 163.60 and 163.42 cents/pound, respectively. January feeder cattle futures slipped 0.03 cents to 225.62 cents/pound, and March feeders plummeted 3.27 cents to 217.05.
Spot market losses continued weighing on CME hogs. The hog and pork industry has been anticipating a seasonal price rebound through mid-winter, but the spot markets have refused to cooperate in the new year. Persistent cash weakness and mixed pork quotes apparently rendered the CME market vulnerable to spillover selling from the cattle pit yesterday. Afternoon reports were mixed, with higher pork quotes implying opening strength. February hog futures dropped 1.15 cents to 78.17 cents/pound in late Thursday trading, while June hogs dove 1.90 cents to 89.00.
Cotton futures inched upward Thursday night. As is so often the case, little fresh news concerning the cotton market emerged overnight. Both equity index futures and the U.S. dollar index set back from Thursday’s highs, which held mixed implications for future apparel demand. We suspect ICE fiber traders were also adjusting their positions prior to Monday’s looming release of important USDA reports. March cotton futures edged up 0.04 cents to 60.60 cents/pound shortly after Friday dawned over New York, while the July contract stalled at 62.11.