The grain and soy markets set back Thursday night. Little fresh news emerged overnight, so it wasn’t terribly surprising to see corn futures decline in early trading. That’s especially true with the belated release of the weekly USDA Export Sales report and the weekend looming. December corn futures dipped 2.75 cents to $3.835/bushel as Friday dawned over Chicago, while May lost 2.75 to $4.045.
Bulls are almost surely taking profits in the soy complex. Vigorous demand obviously helped power the recent bean and meal rally, with oil getting carried along for the ride. However, with the record harvest now mostly in the bin and the advance likely impacting demand, the complex lost its bullish momentum at midweek. Thus, position-squaring prior to this morning’s release of the Export Sales data was to be expected. January soybean futures fell 13.25 cents to $10.4025/bushel Thursday night, and December soyoil slipped 0.10 cents to 31.97 cents/pound, and December meal slumped $6.7 to $386.8/ton.
The wheat markets declined as well. Although the ag industry is clearly concerned about winter kill of some of the recently emerged U.S. winter wheat crop, the markets have already rallied strongly in response. Traders are also aware that recent Export Sales data has tended to disappoint bulls, so they were likely taking profits overnight. December CBOT wheat sagged 2.0 cents to $5.5175/bushel early Friday morning, while December KC wheat slid 3.5 cents to $6.0175/bushel, and December MWE wheat skidded 0.75 at $5.835.
Cattle futures proved quite strong Thursday. Supportive fundamental and seasonal factors still seem to favor the bullish cause in the cattle and beef markets. Moreover, the situation might become extraordinarily tight if the current cold snap is a harbinger of a cold, snowy winter over the central and southern Plains. Prices could spike in such circumstances. Futures seem likely to continue rising on today’s opening. December live cattle futures soared 2.17 cents at 169.92 cents/pound Thursday afternoon, while April futures leapt 1.07 to 169.30. Meanwhile, January feeder cattle futures jumped 0.85 cents to 234.22 cents/pound, and March feeders vaulted 1.02 to 232.82.
Talk of frigid weather may have boosted CME hogs as well. Although Thursday’s spot quotes were generally steady to weak, hog futures rallied in concert with the cattle complex. Traders reportedly think frigid temperatures could also cut hog performance and short-term supplies. However, Thursday's late action suggested a weak opening today. December hog futures climbed 0.60 cents to 91.27 cents/pound at Thursday’s CME settlement, while April hogs ran up 1.15 to 92.85.
A smaller Chinese crop may be supporting cotton futures. New York traders believe the Chinese market is hugely oversupplied with cotton, thereby diminishing export prospects to that country. They may have been encouraged by an overnight report indicating a 7% annual reduction in Chinese production, to 6.51 million tonnes. December cotton futures bounced 0.18 cents to 59.91 cents/pound shortly after sunrise Friday, while March futures rose 0.15 cents to 58.90.