Ag markets proved generally stable Thursday night

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New crop corn slipped in response to modestly improved weather forecasts. The expiring July corn contract continued its ongoing advance overnight, but deferred futures were generally lower. That very likely marked a reaction to Thursday evening runs for the various weather models, since those suggested parts of the Corn Belt could be blessed with significant rainfall in late July. That might greatly benefit the growing corn crop. September corn futures slipped 2.25 cents to $5.585/bushel early Friday morning, while December slid 2.0 cents to $5.25.

The soy complex continues reacting to the old crop situation and weather forecasts. The severe tightness of the old crop situation again supported nearby soybean and meal futures early Friday morning. Conversely, improved weather forecasts for late July seemingly weighed upon new crop prices. Meanwhile, a big drop in Asian vegetable oil prices last night undercut soyoil futures once again. August soybean futures inched up 0.25 cent to $14.7225/bushel just after sunrise Friday, but August soybean oil sank 0.31 cents to 46.22 cents/pound; August soymeal advanced $2.6 to $460.6/ton.

Wheat futures moved generally higher Thursday night. Unlike corn and soybeans, the weather seemingly had little impact upon the golden grain markets, since Northern Hemisphere winter wheat harvests are probably wrapping up. Actually, talk that China will need to import large quantities of wheat is probably the main driver of the overnight advance. September CBOT wheat climbed 1.5 cents to $6.845/bushel in early Friday trading, while September KCBT wheat gained 2.75 cents to $7.1125 and September MGE futures surged 5.0 cents to $7.7275.

Cattle futures may be suffering from pessimism about cash values Friday morning. That is, despite strong support from rising equities and a falling dollar this week, cattle traders are probably expecting cash prices to come in at lower levels later today. The fact that feedlot showlists grew earlier this week, along with persistent wholesale weakness, seem to point toward weakening spot values, which might easily undercut premium CME prices. August cattle skidded 0.05 cents to 121.87 cents/pound just after the sun rose over Chicago Friday, while December declined 0.32 cents to 128.12. August feeder futures tumbled 0.40 cents to 149.72 cents/pound, and November lost 0.37 cents to 155.00.

Hog futures were weak again overnight. Bullish traders have proven unable to sustain the midweek bounce despite sizeable discounts built into second-half futures, thereby encouraging fresh selling. But ongoing wholesale losses are probably the real reason for the sustained weakness, since pork weakness very likely presages similar losses in cash values. August hog futures dropped 0.32 cents to 94.95 cents/pound early Friday morning, while December sagged 0.45 cents to 81.00.

ICE cotton futures were mixed to higher early Friday morning. The general strength probably reflected the persistent strength exhibited by equity indexes this week, since those gains have largely been construed as signs of an improving U.S. economy, which in turn imply strong demand for apparel and for cotton. Prices may also be rebounded from pressure exerted by Thursday morning reports from the USDA. On the other hand, the latest weather forecasts suggest some of the driest areas of the Southern Plains will be blessed with precipitation next week, which might help the Texas cotton crop. October cotton inched up 0.02 cents to 85.20 cents/pound in early Friday action, while December dipped 0.03 cents to 84.71.



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