Corn futures relapse in wake of Wednesday's rally

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Corn futures seemingly suffered a relapse in the wake of their Wednesday rally early 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 9.25 cents to $6.6775/bushel around midsession Thursday, while December added 3.25 cents to $5.3375.

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, and 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. July soybean futures jumped 21.75 cents to $15.16/bushel late Thursday morning, while July soyoil slipped 0.09 cents to 49.55 cents/pound, and July soybean meal rose $5.2 to $445.8/ton.

The fact that wheat futures had not rallied as strongly 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 translate into rising prices. The big U.S. dollar decline may also have encouraged buying. July CBOT wheat futures surged 13.25 cents to $7.0175/bushel just before lunchtime Thursday, while July KCBT wheat advanced 8.75 cents to $7.52, and July MGE futures gained 5.75 cents to $8.135.

Cattle futures fell sharply Wednesday in reaction to news of lower cash market values. Prices rebounded slightly in early trading, but resumed their slide as the lunch hour approached. Late-morning news of a slight rise in choice beef cutout may have played a role in the drop, since it continued the recent trend toward smaller increases, thereby implying a top is near. June cattle slid 0.20 cents to 119.80 cents/pound Thursday morning, while December sank 0.25 to 124.07. Meanwhile, August feeder cattle futures fell 0.80 cents lower to 143.52 cents/pound, and November tumbled 1.27 to 148.57.

In contrast to the cattle market, hog futures surged Wednesday, then set back Thursday morning. The big advance very likely reflected anticipation of continued seasonal strength, whereas the breakdown almost surely marked a negative reaction to the monthly Cold Storage report; it stated ending-April pork stockpiles at an all-time high. June hog futures declined 0.75 cents to 93.80 cents/pound in early Thursday trading, while December futures skidded 0.37 cents to 79.12.

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