Grains end mixed amid broad based commodty decline

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Corn futures were steady-to-mixed on Friday. Corn was higher early along with gains in wheat on news that Ukraine is about to halt wheat exports. Ukraine exports some feed wheat as well as corn so the ban could have implications for corn trade. Even though corn exports so far in 2012/13 have been very poor, expectations are improving for late this year and early 2013. December corn closed 3/4 of a cent higher at $7.61 ½. The March contract was ¼ cent higher at $7.59 1/4

Soybean futures were lower on the close Friday. November lost 11 1/4 cents to close at $15.34 1/4 and January beans lost 9 3/4 cents at $15.36 1/2. New-crop November 2013 dropped 15 1/2 cents at $13.37 3/4. Following sharp gains the past two days and higher prices for three consecutive days, soybean futures encountered some late week selling pressure. The trade took note that the government of Argentina is forecasting this year’s soybean crop in the range of 55 mmt to 58 mmt. The upper end is 3 mmt greater than the USDA forecast. Soybean oil was down sharply with weak crude oil futures.

Futures were closed mixed on Friday. Prices were higher most of the day after Ukrainian officials fulfilled a longstanding warning they may have to cut off wheat exports due to tight supplies. They said they will end shipments Nov. 15th. However, they’ve already shipped 3.5 million tonnes and think they may yet ship another 1.5 million by the Nov. 15th cut-off; putting them at 5 million before they hang out the “sold out” sign. Even if they decided to halt shipments immediately they’d only be 500,000 tonnes shy of what’s “in the market” based on USDA WASDE estimates. That realization seems to have set in later in the day as prices pulled back from the highs. December Chicago wheat closed 4 cents higher at $8.71. KC December was 3 ½ cents higher at $9.05 ½ and Minneapolis was 1 ½ cents lower at $9.38.

Cattle futures were lower Friday on profit-taking after gains earlier this week and ahead of the Cattle on Feed report. After the close October 1 cattle on feed came in down 2.6% from a year ago, slightly below expectations. The report should be supportive to prices on Monday. Underlying factors remain positive. Beef prices are strong and cash cattle traded $2 higher from last week at $127. December cattle futures were 77 points lower at $127.27 and February closed 42 points lower at $131.00.

Lean hog futures settled mixed but mostly higher on Friday. The strong cash market continues to provide support to nearby futures contracts and the December contract settled with a gain of 78 cents at $79.63. The lean hog index is still well above the December contract, just under $84. Deferred contracts were also mostly higher and June settled up 28 cents at $100.83. April and August were the only contracts that settled in the red on Friday with very small declines. Cash hog prices were reported to be steady to a little higher on Friday. Hog slaughter continues to be fairly high with the weekly total estimated up 3.3 percent from a year ago. However, at least so far hog and pork prices are holding up even with the high levels of pork production.

Cotton futures turned lower on Friday. This follows three straight days of tremendous market volatility in daily trading ranges exceeding 4 cents per pound. Volume suddenly tripled after major market participants became aware that with less than a third of the harvest in, there are significant problems with micronaire (fiber thickness) in this year’s crop with only 15% of the crop estimated to be of deliverable grade against futures. This led to panicky short covering by hedgers, fearful that mills might decide to take delivery against long positions. And awareness of that possibility in turn stimulated aggressive short-covering by funds in no position whatever to make delivery. It’s expected to prove a temporary shortage, however, once harvest is complete. December cotton closed 84 points lower at 76.88.


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