Wheat futures soar on Friday

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Corn futures closed mixed on Friday. Futures pulled back shortly after midday as trader banked profits ahead of next week’s September WASDE report. Prices continue to be supported by lower production and yield estimates. Recent estimates by Informa Economics lowered corn yield projections to 119.8 bushels per acre and production output to 10.310 billion bushels per acre. The Reuters poll of average analysts’ estimates for the 2012/13 crop is 10.380 billion bushels. September corn closed down 2 1/4 cents while December closed 1/4 cents higher.

Soybean futures closed lower on Friday. The soy complex closed lower on profit taking and position squaring ahead of next week’s USDA WASDE report. The report is expected to show further reductions to the 2012/13 soybean crop. Informa Economics released its estimates for the 2012/12 soybean crop along with corn estimated. Their projections report soybean production output at 2.639 billion bushels. It is also much less (100 million bushels) than the other widely watched forecast from FC Stone this week at 2.739 billion. November beans closed down 13 cents while January beans closed 10 cents lower.

Wheat futures closed sharply higher on Friday. Slight pressured developed in the wheat complex overnight and early morning but prices rebounded at midday on global supply worries. Prices advanced on speculative news that Russia may be have to implement some type of export restriction on wheat due to wheat production problems in the Black Sea region. Although USDA does not update its US wheat production forecast in next week’s report, it will look at world supply/demand. The trade is forecasting a decline in world 2012/13 carryout to 174.5 mmt from 197.3 mmt. September wheat at CBOT closed 12 3/4 cents higher; KCBT closed 12 cents higher; and MGE closed 10 3/4 cents higher.

Live cattle futures closed lower on Friday. Cattle futures closed mostly lower to wrap up an interesting week of trade. Earlier in the week, prices were supported by expectation for higher cash prices. However, as the week progressed, the lack of direction in the cash market began to weigh on market prices. Trade has yet to pick up as of this writing, but the gap between packer bids and asking prices remains quite distant. October closed 43 cents higher while December closed 3 cents lower.

Lean hog futures closed lower on Friday. Hogs futures continue to plummet as market fundamentals worsen. At one point during the session, the October contract was down over 80 cents while December traded around $70 most of the session. Traders and analysts are concerned that steadily declining cash prices and the increase in hogs going to slaughter are prohibiting prices from stabilizing. Today’s hog slaughter is estimated 17,000 head higher than this time last week and Saturday’s slaughter is expected to be 325,000 head, the largest weekend slaughter since early January. Both October and December hogs closed 40 cents lower today.



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