Ag markets posted mixed reactions to the USDA data

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Corn futures reacted strongly to the USDA news. Despite news of a sizeable U.S. corn sale this morning, corn futures remained under pressure ahead of the late-morning USDA reports. However, the data looked quite bullish for the yellow grain outlook, since the USDA cut its estimate of the 2013 U.S. crop and posted stock totals well below forecasts. March corn futures jumped 15.5 cents to $4.275/bushel around midday Friday, while May soared 15.0 to $4.3525/bushel.

The USDA reports sustained early soybean and meal gains. Asian palm oil losses depressed the soyoil market, but talk of vigorous demand reportedly boosted beans and meal through early Friday morning trading. The USDA reports were generally seen as supportive for the soy complex, because the USDA stated December bean stocks slightly below expectations. Other numbers were less friendly, so CBOT prices set back from early highs. March soybeans rose 9.0 cents to $12.8275/bushel just before noon Friday, while March soyoil fell 0.31 cents to 37.65 cents/pound, and March soymeal added $5.6 to $419.9/ton.

The wheat markets traded poorly after the USDA reports. Thursday night news that Taiwanese buyers had bought U.S. wheat was seconded by an announced sale to Venezuela this morning. Major premiums for high-protein spring wheat in Minneapolis also supported that market. However, prices dove after the USDA released its latest reports, since the December stocks total and the 2013/14 carryout figure topped expectations. March CBOT wheat futures tumbled 14.0 cents to $5.7025/bushel in late Friday-morning action, while March KCBT wheat futures fell 10.0 cents to $6.29, and March MWE futures dropped 4.25 to $6.25.

Record beef prices are supporting cattle futures. The cattle market seemed set to resume its late-2013 rally Thursday, especially with Chicago prices trading below last week’s late highs. The afternoon setback suggested significant trader doubts about the short-term outlook. Still, beef cutout values jump to record highs yesterday afternoon, which seemingly bodes well for short-term prospects. February cattle futures climbed 0.12 cents to 136.67 cents/pound just before lunchtime Friday, and April futures gained 0.02 to 136.90. Meanwhile, March feeder cattle futures reversed lower by 0.67 cents to 168.15 cents/pound, and May sank 0.67 to 169.25.

Hog futures moved up Friday morning. Ideas that the hog market is set for a technical and seasonal rally apparently supported CME hog prices in early trading. Thursday’s late wholesale strength and mixed-to-firm cash quotes may have encouraged bulls looking for a rally into mid-February. February hogs surged 0.90 cents to 86.15 cents/pound by late Friday morning, while June rose 0.40 to 101.00.

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