The corn market is apparently set to post its third consecutive weekly loss, with slow exports and tumbling soybean prices undercutting domestic prices. However, the size of the recent decline has sparked some ideas that demand will rebound at current levels. Moreover, having the holiday season looming next week has reportedly sparked a good deal of short covering/book squaring today, thereby adding support to early-morning gains. Technicians may also be looking to buy after the nearby March contract rebounded after dipping into its early-July chart gap. March corn was up 4 3/4 cents to $7.01 1/4 and December had risen 1 1/2 cents to $6.05 1/4 in late morning trading.
January soybean futures plunged $1.06/bushel from Monday’s high to Thursday’s low, so few in the industry would deny the market was oversold at the end of yesterday’s CBOT session. Neither could they have been particularly surprised by the Friday morning rebound as bears took profits ahead of the holiday season. Bulls can also point to talk of firming basis bids and Thursday’s January contract bounce from the $14.000 level for today’s early strength. The market may experience much more book squaring next week, but we would warn that there is a significant possibility that beans will resume their decline in early 2013. January beans were trading 17 1/4 cents higher at $14.26/bushel late this morning, while January soyoil was jumped 0.83 to 48.74 cents/pound and January meal posted a more sedate $4.2 advance to $431.9/ton.
Wheat prices rebounded in concert with corn and soybeans Friday morning, with short covering also playing a substantial role in the advance. Actually, the wheat market may also have gotten a boost from a statement by a major German grain trading firm indicating that U.S. wheat is most competitively priced on the international markets at this time. However, having the March CBOT contract drop below the psychologically important $8.00 level yesterday may prove a major hindrance to short-term rally attempts. That may partially explain why March CBOT wheat rose just 4 1/2 cents to $7.95/ bushel this morning, while March KCBT wheat edged just 2 1/4 cents higher to $8.46 and March MGE futures climbed only 3 cents to $8.86 3/4.
After proving unable to sustain their Wednesday breakout yesterday, cattle futures continued their slide Friday morning. We blame the choice cutout losses seen this week for a portion of the drop, but must also cite the broad commodity breakdown experienced Thursday for a portion of the ongoing slide. Traders are probably squaring up livestock positions ahead of the holiday along with similar actions in other commodities; that may be particularly true in the cattle pit, since the afternoon USDA Cattle on Feed report holds the potential to move the market substantially. February live cattle futures slipped 0.35 cents to 133.20 in early trading and April had fallen 0.50 cents to 136.90 cents/pound.