Ag markets diverged significantly Tuesday morning

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Corn futures remained under pressure Tuesday morning. Although traders were saying last week’s USDA forecast of a large 2014 U.S. corn crop was overly optimistic, that talk proved unable to reverse early CBOT slippage. The market is apparently intent upon making a thorough test of underlying support around current levels. March corn stabilized at $4.515/bushel Tuesday morning, while May lost 0.25 to $4.575.

The soy complex bounced from early lows. Soybeans and products traded weakly Monday night in apparent consolidation of recent gains. A mistaken announcement of a cancelled sale also depressed prices, but a subsequent announcement that the shipment in question was not a cancellation by a fresh sale sparked a sizeable rebound. March soybeans gained 3.0 cents to $13.895/bushel by late Tuesday morning, while March soyoil dropped 0.20 cents to 40.55 cents/pound, and March soymeal slipped $0.5 to $466.4/ton.

News of an Egyptian cancellation undercut wheat markets Tuesday. The USDA also announced that Egypt had cancelled a wheat sale for 2013/14 delivery, which sparked aggressive selling across the various exchanges. However, the fact that it was a soft-red winter wheat sale enabled the KC and MWE markets to come back from their early lows. March CBOT wheat futures fell 8.25 cents to $6.095/bushel around midsession Tuesday, while March KCBT wheat futures had dipped just 2.25 cents to $6.8675, and March MWE futures rose 3.0 to $6.6575.

Wholesale strength seems to be boosting nearby cattle futures. Big wholesale gains posted Monday afternoon played a big role in boosting cattle futures in early Tuesday trading. Indeed, the beef gains very likely persuaded traders that beef packers will pay up for fed cattle again later this week. April cattle futures rallied 0.85 cents to 142.07 cents/pound in late Tuesday morning action, while August added 0.67 to 131.47. Meanwhile, March feeder cattle advanced 0.65 cents to 170.85 cents/pound, and May rose 0.52 to 172.85.

Hog futures rebounded from early losses. Seasonally rising cash and wholesale prices appeared to do little to boost hog futures Tuesday morning, but bulls rather obviously became more active as the morning passed, with the April contract leading the way higher. April hogs jumped 0.90 cents to 100.15 cents/pound around midday Tuesday, while June ran up 0.40 to 108.52.

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