The corn market continued its recent decline Thursday, due largely to growing ideas that high U.S. prices are rationing demand even more substantially than seems to be required by the current shortage. However, prices rebounded Friday morning, possibly due to strength spilling over from the soybean market. Bulls were probably reacting to news that U.S. corn had captured a sizeable portion of purchase made by a South Korean firm after having been shut out of a similar transaction earlier in the week. March corn rose 5 cents to $7.25 1/4 in early trading, while its December 2013 counterpart lifted 2 1/4 cents to $6.28 1/4 per bushel.
Soybean futures reacted strongly to the bullish results of the weekly export sales report, but gave back a much of the rise later in the day. It surged again in overnight activity, thereby giving rise to suspicions that large exports sales are being transacted at this time. Such ideas were probably exaggerated by the monthly NOPA crush report released this morning; the November crush met expectations, but that does not change the fact that it was the largest monthly figure in since early 2010. January beans had jumped 17 3/4 cents by late morning, while January oil had risen 1.00 cent to 50.00 cents/pound and January meal rose $1.8 to $457.1/ton.
Disappointment with U.S. wheat sales exaggerated recent wheat market losses again Thursday, with CBOT prices testing support at lows not seen since early summer. A March futures drop below the $8.00/bushel range might open the door to a more substantial breakdown in early winter. However, wheat futures have apparently attracted fresh buying at the lows and rose significantly Friday morning. The big soybean surge probably offered spillover support. We also have to wonder if the weather system sweeping into the Plains from the Southwest is now expected to drop less rainfall on parched wheat fields this weekend than was previously anticipated. March CBOT wheat had rebounded by 5 1/4 cents to $8.14/bushel this morning, March KCBT wheat rose just 1 3/4 cents to $8.64 1/2 and March MGE futures jumped 4 3/4 to $9.04 1/2.
The persistent tightness of the cattle and beef supply/demand situations continues supporting CME live cattle prices. Indeed, the implied optimism seemed at least partially justified this morning by news that Panhandle fed cattle seemed set to change hands around 124.50 cents/pound today. That represents a small victory on the part of feedyard managers, since prices had dipped to 124.00 last week, and current circumstances appeared less conducive to market strength. February cattle rose 0.67 cents to 132.15, while and April moved up 0.72 cents to 136.10 cents/pound.
Although country prices reportedly rose modestly Friday morning and live cattle futures were leading the way upward, CME lean hog futures declined. The prospect of a substantial slowdown in pork buying during the run-up to the year-end holidays, as well as depressed packer buying during that same period may be weighing upon swine values. The threat of the usual late-December breakdown in ham prices cannot be encouraging the market either. Conversely, traders are fully cognizant of the upside potential open to the market once the industry has gotten past its holiday disruptions. February hogs had slipped 0.25 cents to 85.65, while June dropped 0.55 cents to 99.47 cents/pound in Friday morning trading.