Ag markets diverged prove rather volatile on Thursday

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Corn futures seemingly suffered a relapse in the wake of their Wednesday rally Thursday morning, but came back later. Persistent cash market firmness probably boosted prices, as did the weekly USDA Export Sales report. The old crop result, at 104,500 tonnes, came in at the lower end of expectations, but the new crop figure, at 341,600 tonnes topped all published forecasts. July corn climbed 3.5 cents to $6.62/bushel at its Thursday close, while December added 4.25 cents to $5.3475.

Soybean futures also traded weakly early Thursday morning, but later seemed to benefit from the USDA Export Sales report. Old crop sales reached 183,500 tonnes last week, while the top forecast was 100,000; new crop sales netted 838,900 tonnes, easily topping the largest estimate at 450,000. However, traders appeared much less optimistic about new crop price prospects, possibly due to ideas plantings are progressing very rapidly. The stunning reversal from noon highs may presage short-term July weakness. July soybean futures closed up 5.25 cents at $14.995/bushel Thursday after having reached $15.4675 at one point. July soyoil rose 0.02 cents to 49.66 cents/pound, and July soybean meal fell $3.6 to $437.0/ton.

The fact that wheat futures had not performed as well as corn and beans lately may help explain their relatively strong reaction to the weekly USDA Export Sales report. Both old and new crop wheat sales, at 239,000 and 713,600 tonnes, respectively, topped pre-report expectations, which then seemed to boost futures prices. The big U.S. dollar decline may also have encouraged buying. July CBOT wheat futures surged 14.75 cents to $7.0325/bushel at its Thursday settlement, while July KCBT wheat advanced 10.5 cents to $7.545, and July MGE futures gained 5.5 cents to $8.1325.

Cattle futures continued their Wednesday breakdown Thursday, with talk of declining cash prices once again seeming to drive the market downward. Late-morning news of a slight rise in choice beef cutout may have played a role in the drop, since it sustained the recent trend toward smaller increases, thereby implying a top is near. June cattle settled 0.88 cents lower, at 119.12 cents/pound, Thursday afternoon, while December sank 0.65 to 123.67. Meanwhile, August feeder cattle futures fell 1.67 cents to 142.65 cents/pound, and November tumbled 1.67 to 148.17.

After rallying strongly Wednesday, hog futures proved vulnerable today. The breakdown almost surely marked a negative reaction to the monthly Cold Storage report, which stated ending-April pork stockpiles at an all-time high. June hog futures declined 0.35 cents to 94.20 cents/pound at its Thursday afternoon close, while December futures skidded 0.10 cents to 79.40.

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