Grain and soy markets advanced Thursday night

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Corn seems set to end the week on a firm note. Strength spilling over from the soy and wheat markets appeared to boost corn futures in early Friday trading. Persistent U.S. dollar weakness may also be supporting grain values, since that lowers the nominal cost to export customers. December corn futures rose 3.25 cents to $4.4625 around dawn Friday, while May futures gained 3.5 cents to $4.6725/bushel

Talk of robust export demand appeared to boost the soy complex Friday. CBOT traders believe U.S. firms have sold over 3.0 tonnes of soybeans in the past 2-3 weeks. Indeed, they probably expect the pace to accelerate in the wake of the current breakdown in the value of the dollar. November soybeans climbed 7.25 cents to $13.005/bushel in early Friday action, while December soyoil advanced 0.28 cents to 41.40 cents/pound, and December soymeal moved up $2.0 to $415.0/ton.

Wheat futures also benefited from export optimism Friday morning. The ongoing U.S. dollar decline is probably encouraging wheat buying from overseas, especially with China and Argentina reportedly encountering problems with their 2013/14 crops. Recent talk that China has already bought 1.2 million tonnes of U.S. wheat this month exemplifies that optimism. December CBOT wheat surged 10.5 cents to $6.965/bushel early Friday morning, while December KCBT wheat jumped 12.75 cents to $7.6175, and December MGE futures rallied 11.0 to $7.56.

Cattle traders seemed ambivalent Friday morning. Cash cattle prices essentially matched their all-time highs Thursday. Bulls who had been expecting that strength seemed to take profits at that point, thereby prompting a stunning CME reversal. They now seem confused as to forthcoming direction, especially when recalling the market’s historical tendency for late-October weakness. December cattle futures inched up 0.02 cents to 131.80 cents/pound around sunrise Friday, while April slipped 0.15 cents to 134.47. Meanwhile, November feeder cattle tumbled 0.52 cents to 166.37 cents/pound, and January fell 0.22 to 166.37.

The hog market was also mixed in early trading. That probably reflected the resumption of USDA reports and the surprising cash firmness and significant pork weakness indicated by them. Concerns about a potential follow-through drop in cattle prices may also be deterring bullish ideas. December hog futures edged 0.20 cents higher to 88.65 cents/pound early Friday morning, while April slid 0.02 cents to 90.22.

Cotton futures were surprisingly weak in early Friday action. The ongoing U.S. dollar decline and modest overnight equity strength are probably supporting cotton futures at this point. Bulls can also point to Thursday’s technical bounce from six-week lows. However, the U.S. harvest is in full swing, which may be limiting the market’s upside potential for now. December cotton sank 0.18 cents to 83.64 cents/pound as the sun rose over New York Friday, while March lost 0.15 to 84.80.



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