Crude oil seemed to lead commodities higher Friday. Ideas that the prospective settlement of EU/Greece conflict over debt and monetary union seemed to alleviate global financial fears and crush the dollar Thursday. That may also help explain the broad advance posted by the commodity markets Friday morning. Having nearby crude oil futures threatening to top their 50-day moving average also encouraged. Talk of improved demand and short-covering before the long weekend probably supported corn futures. March corn ended the week having gained 4.25 cents to $3.8725/bushel, while July rose 4.5 to $4.0275.
News of a China sale likely spurred buying in the soy complex. Soybeans and meal appeared to rally on underlying demand strength Thursday night. The daily USDA export reporting system also indicated that Chinese buyers had contracted to buy 110,000 tonnes of beans for delivery next year. Bullish crude oil leadership and short-covering ahead of the long weekend may also have spurred buying. March soybean futures surged 6.75 cents to $9.905/bushel Friday’s CBOT session ended, while March soyoil climbed 0.39 cents to 32.40 cents/pound, and March meal moved up $1.8 to $332.3/ton.
The wheat markets climbed strongly as well. Wheat bulls joined the general commodity stampede Friday despite generally bearish fundamentals. Ideas that Russian export tariffs are keeping that country’s product from undercutting the global market may have encouraged buyers, as did the generally optimistic demand environment. In addition, nearby futures broke out above the confluence of their short-term moving averages, thereby encouraging technical buying. March CBOT wheat advanced 11.75 cents to $5.33/bushel at their Friday settlement, while March KC wheat added 8.75 cents to $5.6275/bushel, and March MWE wheat lifted 12.75 to $5.87.
Cattle futures surged in early Friday trading. CME cattle traders essentially ignored overnight news that a Canadian cow had been found infected with ‘mad cow’ disease, since it’s rather obvious that there’s very little threat to the American beef supply. Instead, traders seemed to react to the idea that country cattle will once again trade well above the discounted levels built into CME futures. April live cattle futures leapt 2.10 cents to 153.22 cents/pound in late Friday action, while August cattle jumped 1.92 cents to 144.00 cents/pound. Meanwhile, March feeder cattle futures spiked 3.55 cents to 203.85 cents/pound and May feeders soared 2.17 to 202.52.
Bullish expectations again seemed to boost CME hogs. The short-term hog/pork outlook still seems less than promising, especially with a four-day work stoppage reportedly looming at West Coast ports. Nevertheless, deferred hog futures streaked upward Friday, which probably reflects anticipation of resurgent pork demand once the port situation ends. April hog futures bounded 1.52 cents higher to 66.02 cents/pound at Friday’s CME close, while June hogs surged 1.62 to 80.12.
Cotton joined Friday’s general advance. The cotton market has performed well lately, so the idea that recent deflationary talk has been overdone, as exemplified by the crude oil market’s challenge of its 50-day moving average, probably encouraged cotton bulls as well. Conversely, position-squaring before the three-day weekend seemingly took the form of long-liquidation, thereby limiting today’s rally. March cotton futures settled 0.22 cents higher at 62.70 cents/pound Friday afternoon, while the July contract climbed 0.31 to 63.52.