Corn prices lower Friday morning

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Corn prices settled lower on Thursday. Futures were steady to only slightly lower early, but another poor export sales week pushed prices lower. Sales for the current marketing year were only 2 million bushels, one of the poorest sales weeks on record. Export commitments so far in 2012/13 are down 45% from a year ago. With cancelations, weekly new crop sales were actually slightly negative. The market has been waiting on some positive export news, but sales this week were disappointing instead. The Coast Guard cut maximum barge draft on the lower Mississippi River to 9 ft from 10 ft previously due to low water. March corn settled 6 1/4 cents lower at $7.51 1/2. December 2013 was 2 cents lower at $6.43 1/2.

The soybean bull market lives on with the January contract notching double-digit gains for the third time in four sessions. Soybeans extended the bull market on continuing concerns about production risks in Argentina. The Bolsa said progress was only 54% complete this week. USDA’s weekly export sales report found more bean sales than expected. Bearish news was found in the Brazilian government forecast for its crop at 82.6 million tonnes, which is greater than average trade expectations at 81 million. The Brazilian government also had positive comments about the crop progress in general. At the close, January beans were up 12 cents at $14.91 1/4. November 2013 gained 2 3/4 cents at $13.34 3/4.

The bumpy road for wheat continued Thursday. The first two days of the week, wheat was strong most of the day but closed lower. Wednesday it managed to hold its gains and close higher. But today, it was a real teeter totter. It traded higher in early going, then moved to the minus side midsession, but came back to close with small gains. Disappointing export sales this morning were behind the reversal. If Argentina’s woes are going to benefit the U.S. in shifting global export business our way, it had better kick in soon. U.S. export sales year-to-date lag where they “should” be to warrant USDA’s current forecast for 1.1 billion bu. in 2012-13. In fact, the gap widened out another 10 million bu. in this the weekly sales report, to 220 million. But by the close, selling interest dried up as concerns about Argentina’s current crop and next year’s U.S. crop remain supportive factors. At the close, CBOT March was up 2 at $8.62; KCBT March was up 4 1/4 at $9.12, and MGE March was up 3 at $9.35 1/4.

Despite continued weakness in wholesale beef values and talk of increased feedlot showlists this week, which in turn might bode ill for country fed cattle prices, 2013 live cattle futures rose modestly Thursday. The general advance may have marked an industry response to a strong upward move by the equity markets, which in turn came in response to a better than expected result on the weekly Jobless Claims report. Nearby futures could prove vulnerable to weaker cash trading Friday, but the cattle industry is still closely focused upon the potential for an extreme cattle/beef shortage in 2013. December cattle inched 0.10 cent higher to 126.25 cents/pound, while the more heavily traded February future advanced 0.57 cents to 131.20 cents/pound.

Concerns about seasonal weakness across the hog and pork complex caused CME lean hog futures to dive Thursday. Mid-December hog slaughter typically proves extremely large, whereas grocers routinely complete their ham purchases for the holiday season at about the same time. Those factors could undercut swine prices badly as a consequence, especially if pork loins follow their pattern of early-winter weakness from the past few years. The fact that hog and pork prices have risen dramatically from a late-summer low may also bode rather ill for early-winter pork demand. The expiring December contract fell 1.55 cents to 83.40 cents/pound during the morning hours, while the February future dropped 1.20 cents to 84.40 cents/pound.

Cotton futures reacted well to Thursday’s weekly export data, since both sales and shipments easily exceeded recent norms. Sales for the 2012/13 marketing year topped the average for the previous four weeks by 25%, while shipments jumped 76% above the four-week mean. Strong Chinese ladings of 108,700 running bales boosted the total substantially and probably encouraged the cotton market, since China now represents such a huge market. Prices surged in reaction to the news, but subsequently gave back a sizeable portion of the rise. March cotton ended the day 44 points higher at 73.48, while its July counterpart rose just 0.23 cents to 75.23 cents/pound.


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