The grain markets resumed their rally Thursday night. Weather concerns are clearly worrying wheat traders at this point, which in turn seems to be affecting the corn market. Yesterday’s export news seemed quite supportive of the yellow grain market as well. Some may also be thinking about the potential for a big advance if summer weather turns hot and dry. July corn futures gained 2.25 cents to $3.6725/bushel early Friday morning, while December edged up 2.0 to $3.8425.
Soybeans and meal bounced from 2015 lows. Despite signs of persistently firm demand for soybeans and meal, those markets have recently posted fresh lows for 2015. Huge South American supplies and prospects for a strong start to the U.S. growing season are clearly handicapping bullish efforts. Nevertheless, soybean and meal prices rose modestly overnight, possibly due to short-covering before the long Memorial Day weekend. Soyoil followed crude prices lower. July soybean futures rallied 2.25 cents to $9.4075/bushel shortly after sunrise Friday, while July soyoil sagged 0.15 cents to 32.10 cents/pound, and July meal added $3.0 to $307.1/ton.
Wheat markets are threatening to break out to the upside. With winter wheat in the southern Plains faces expected to get inundated again this weekend and dryness now beginning to threaten crops in other areas of the globe, wheat futures proved quite strong this week. Indeed, the nearby contracts are threatening a technical breakout to the upside, thereby potentially triggering a bullish follow through. July CBOT wheat futures climbed 5.25 cents to $5.2725/bushel Thursday night, while July KC wheat rose 4.0 cents to $5.6175/bushel, and July MWE wheat advanced 3.5 to $5.8175.
Cattle futures reacted well to country cash news Thursday. Bearish seasonal expectations have weighed upon cattle futures lately, but Great Plains prices proved surprisingly firm Wednesday afternoon. That news clearly sparked yesterday’s strong opening and sustained strength. However, beef cutouts dove on late afternoon reports, which may bode ill for today’s opening. June live cattle futures settled up 1.02 cents at 152.37 cents/pound Thursday, while August cattle vaulted 1.17 to 150.90. Meanwhile, August feeder cattle futures surged 1.02 cents to 217.72 cents/pound, and November feeders ran up 1.02 to 215.12.
Hog futures rebounded from yesterday’s early losses. Wednesday’s mixed-to-lower spot quotes reinforced trader expectations of short-term hog and pork weakness, with Thursday’s weak opening generating significant follow-through to the downside. However, the midday pork reports were quite strong, thereby seeming to spark a quick CME comeback. The late June surge seemingly set the stage for further short-term gains, but afternoon cash quotes proved weak. That suggests early Friday morning slippage. June hog futures jumped 1.22 cents to 83.77 cents/pound Thursday afternoon, while December settled 0.05 lower at 70.20.
Traders may be squaring cotton positions before the weekend. The ICE cotton market has not acted well lately, with this week’s drop violating several important levels of support. Persistent Texas rainfall may have caused the decline. The nearby July contract is no resting on 100-day moving average support, which is probably causing many short position holders to square their holdings before the long Memorial Day weekend. July cotton inched up 0.06 cents to 63.79 cents/pound in early Friday trading, while December futures crept 0.07 higher to 64.77.