Grain complex rebounds to close the week higher

Corn futures closed 14 to 17 cents higher on Friday. Corn futures cut short a three day losing streak to end the week on a high note. Market prices turned the tide at midday to settle at $8.11 (Sept) and $8.10 (Dec). Prices support was tied to private estimates for the 2012 corn crop. Farm futures magazine puts production at 9.57 billion bushels down 26 percent from USDA’s projection, Informa Economics lowers production to 10.33 billion bushels (120.7 bu/ac), while Doane economists peg production down at 10.792 billion bushels (123.1 bu/ac). The lower dollar index and higher outside markets were also friendly for prices today.

Soybean futures closed 11 to 12 cents higher on Friday. Soybean futures bucked early morning pressure to close higher along with the other grain markets. Prices turned at midsession as several private economic firms released their production estimates ahead of USDA’s WASDE report next Friday. Informa Economics lowers production to 2.79 billion bushels (37.2 bu/ac) while Doane economists peg production down at 2.725 billion bushels (36.6 bu/ac). Trade is now focused on next week’s WASDE report, placing weather forecasts for rain on the backburner for the moment

Wheat futures closed 21 to 25 cents higher on Friday. Wheat futures followed corn and soy market higher on short covering as buying interest increased across the grain complex due to declining production estimates. Improved macro economic factors and the lower dollar index provided support to prices, making wheat more attractive on the international market. Long term fundamentals are becoming more bullish as key wheat producing countries struggle with adverse weather. Struggling wheat production in countries such as India, Argentina, Russia and Australia due to exceptionally dry weather will likely provide support to wheat prices in the long term.

Live cattle futures closed lower on Friday. Cattle futures opened today’s trade higher on rising cash prices and improvement in wholesale beef prices (Thursday). Midday boxed beef prices were also higher, with choice up 54 cents and select 57 cents higher. However, prices were not able to sustain upward momentum due to speculative liquidation and spillover pressure from the hog market.

Lean hog futures closed sharply lower on Friday. Lean hog futures closed sharply lower again on Friday. The nearby contracts were decisively lower, posting losses up to $2 dollars. Weakness in the market can be attributed mostly to lower cash prices and the pull back in the pork carcass value on Thursday.

Cotton futures closed 200 points higher on Friday. Cotton futures posted strong gains today along with the grain complex. Upward momentum was attributed to the lower dollar index and the rally in stock markets, which caused rounds of speculative buying across commodities.

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