Grain, cattle and milk futures were mostly lower on Friday, with hogs higher.
Bryan Doherty, Total Farm Marketing, says grains failed to extend gains on Friday in light post holiday volume.
He says weather was the biggest bearish factor as there isn’t a threat to the nation’s corn or soybean crop and even the ridge that’s building in will actually provide some much needed heat and sunshine for the crop development.
Corn and soybeans also saw profit taking after running up into chart resistance.
“November soybeans had a higher weekly close but scored a reversal on Friday.The contract came close to the February 4 high of $10.75 ¾, rallying as high as $10.74 ¼ before failing and closing lower,” which he says is a concern.
Doherty adds that the technical action may also indicate the EPA’s higher blending proposal for biomass based diesel is adequately priced into the market.
Friday was also option expiration which may have forced some additional liquidation plus with first notice day coming up on the July contracts farmers need to price basis fixed contracts.
As a result, July corn made a new low for the move and for the calendar year hitting a low of $4.28 1/4.
Wheat also saw profit taking on Friday, but ended higher for the week.
Doherty says its unusual for wheat to rally this time of year but he says the market was adding some weather premium due to wind and excessive rain in hard red and soft red winter wheat areas that will trim yield, quality and slow harvest.
He says he’s fielded plenty of questions about whether or not the $.22 to $.24 cent rally in winter wheat futures on Wednesday was attributed to the market adding war premium and he thinks that news only provided mild, if any, support.
Cattle futures started higher on Friday but failed with cash news lower for the week and with positioning ahead of the Cattle on Feed Report.
Cash developed in the North $3 to $5 lower on Wednesday and then was lower again on Friday.
A light trade was reported in parts of the South at mostly $228, $7 to $8 lower than last week’s weighted averages. Just a little clean up was reported in the North at $376, $4 lower than the prior week’s weighed averages.
Even though the futures are at a a large discount, Doherty says the market eventually acknowledged it.
Milk futures continue to see pressure and are in a steep down trend that started the end of May.
Doherty says it is a result of higher milk production and the lack of cow liquidation as producers are holding on to females for their ability to produce offspring that can be sold into the hot beef market.
The sharp drop in cheese prices has also drug down the Class 3 market, which he says is concerning.
