The weekly USDA Export Sales report stated last week’s corn result at just 49,100 tonnes, whereas pre-report forecasts fell into the 200,000-350,000 tonne range. The Christmas holiday almost surely depressed the total, but the USDA figure implies a near boycott of U.S. corn by export customers. However, CBOT futures held up surprisingly well in the face of the news. Talk that prices around Corn Belt ethanol plants have held up extremely well in the face of the recent futures breakdown may be supporting the market. Still, nearby futures show few signs of trying to break out of their recent downtrend at this point. March corn was trading 1 3/4 cents lower, at $6.87 1/2, by late morning, while December had plunged 9 3/4 cents to $5.78 1/4 per bushel.

U.S. soybean sales reached 434,900 tonnes last week, which came in at the upper end of the forecast range. Thus, bulls might have been forgiven for thinking the bean market might bounce in the wake of the report. That was not the case, with most 2013 contracts trading over 20 cents lower around mid-session. We attribute the drop to news that the USDA attache in Brazil had boosted the unofficial estimate of its forthcoming soybean crop by about 2.0 million tonnes. March futures are now threatening to drop below their November lows, which in turn might precipitate a larger decline. March beans had fallen 22 3/4 cents to $13.63 3/4 per bushel in late-morning activity, while March soyoil was down 0.46 cents to 49.75 cents/pound and March meal had plunged $9.8 to $395.8/ton.

Wheat traders could not have been happy with the weekly Export Sales result either, since the USDA figure, at 152,200 tonnes, fell well short of expectations in the 350,000-550,000 range. A portion of the shortfall might be blamed upon disruptions associated with the Christmas holiday, which may be one reason wheat futures posted a rather muted reaction to the data. Still, having the March CBOT contract drop below the psychologically important $7.50 level seems to presage continued losses. On the other hand, the fact that nearby futures have reached deeply oversold levels may be setting the stage for a substantial rebound in the near future. But traders may need to see signs of improved export demand before they will be willing to aggressively pursue the long side of the wheat market. March CBOT wheat fell 8 1/4 cents to $7.47 1/4 Friday morning; March KCBT wheat was down 7 cents to $8.04 1/2 and March MGE futures tumbled 5 cents to $8.41 1/2 per bushel.

Bullish cattle traders may have been somewhat disappointed that significant cash trading had failed to develop Friday morning, which would partially explain the modest CME losses posted around midsession. They probably expect fed cattle to change hands around 129 cents/pound across the Great Plains this afternoon, thereby at least partially justifying the premiums built into nearby futures. Ultimately, a wholesale breakout to record highs might be required to push the February and April contracts beyond their Thursday peak, but that is not guaranteed. February cattle declined 0.45 cents to 133.40 cents/pound just before the lunch hour, while April dipped 0.32 cents to 137.00 cents/pound.

Thursday afternoon reports indicating sizeable gains in cash hog and wholesale pork values very likely played a substantial role in boosting nearby futures Friday morning. The fact that most pork cuts, with the exception of the butts posted significant gains seemed particularly impressive, since bulls are almost surely relying upon much more of the same during the weeks just ahead. Bulls may also have been pleased to see projections for the CME lean hog index, which futures cash-settle against, move above the 83.00-cent level. That makes the advances implied by nearby futures seem more easily attainable. February hogs surged rose 0.50 cents to 86.90 cents/pound around mid-session, whereas its June counterpart was just 0.15 cents higher at 99.10.