Grain complex closed higher on Thursday

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Corn futures closed sharply higher on Thursday. Corn futures surged after the release of the October WASDE estimates. USDA lowered corn production only 21 million bushels to 10.704 billion bushels. Corn yields were lowered as well to 122 bushels per acre, slightly below trade expectations. Prices responded positively as world and domestic ending stocks were lowered versus the previous month. Domestic ending stocks were lowered to 619 million bushels while global ending stocks were lowered to 117.270 million tonnes. December corn closed 36 cents higher.

Soybean futures closed higher on Thursday. Soybean futures closed sharply higher despite bearish estimates for 2012 crop production. USDA raised 2012 soybean production 226 million bushels to 2.86 billion. Yields were also raised. The average yield was pegged at 37.8 bushels per acre up 2.5 bushels per acre versus the September estimate. However, prices were supported by tight domestic ending stocks. As with the corn, soybean futures surged as a means to ration demand/use. November soybeans closed 25 ¾ cents higher.

Wheat futures posted sharp gains on Thursday. Spillover strength from corn and soy complex is boosted wheat futures amid a neutral supply/demand report. Production estimates were relatively unchanged from the previous month, while domestic ending stocks were pegged a little above trade expectations but lower than the previous month. Foreign production was cut as expected. Total production declined 5.7 million tonnes, with sharp cuts in Australia and Russia. December wheat at CBOT closed 14 ¾ cents higher; KCBT closed 20 ½ cents higher; and MGE is trading 13 cents higher.

Live cattle futures closed lower on Thursday. Buying interest picked up early in the cattle complex after corn prices skyrocketed on the release of a somewhat bullish supply/demand report. Futures also advanced on expectations for steady to higher cash trade this week but minimal cash trade movement dampened expectations for higher prices. Preliminary asking prices are $126 plus in the South and $195 plus in the North. October cattle closed 33 cents lower while December closed 65 cents lower.

Lean hog futures closed mixed on Thursday. Nearby 2012 contracts were pressured the majority of the session on profit taking and lower bids for cash hogs by packers. The October contract is set to expire tomorrow at noon and December will take the stage as the front month contract. Cash prices were steady today and futures found additional support from a higher pork carcass value as well as support from the grain complex. Buying interest in the deferred contracts increased as corn and soymeal prices skyrocketed; sparking worry that pork production will decrease further as a result of high feeding costs. The October contract closed 25 cents lower while the December contract closed 60 cents lower. Deferred (2013) contracts closed firmly higher.

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