Grain futures generally defied bullish efforts at midday

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After performing surprisingly well Monday, corn futures accelerated upward Tuesday morning. Wire service reports again cited cash market firmness and signs of improving demand as powering the market upward. Technicians may be buying as well, especially with the nearby March contract having pushed above chart resistance associated with its 10-day moving average. March corn had risen 10.5 cents to $7.04/bushel around midsession Tuesday, while December gained 3.25 cents to $5.535.

Soybean futures proved quite firm Tuesday morning. The market seemed set to continue its recent slide, with talk of improving Argentine weather, the progressing Brazilian harvest and concerns about potential cancelations of Chinese orders weighing upon prices. No news item obviously powered the bounce from early lows, but we are inclined to agree with suggestions that tightening farmer supplies played a role. Still, one has to wonder if soybean rallies can be sustained with the Brazilian harvest hitting its stride. March beans were down 2.75 cents to $14.485 late Tuesday morning, while March soyoil remained under pressure from the palm oil market; it was down 0.75 cents to 49.33 cents/pound, whereas March meal had gained $1.0 to $426.6/ton.

Strength spilling over from the corn pit also seemed to boost the wheat markets Tuesday morning. Given the bearish implications of the ongoing winter storm and the moisture it is providing to large areas of the Great Plains, the wheat bounce is rather stunning. U.S. producer insistence upon better prices may be supporting the market, but the bounce may also have a significant technical component in the wake of recent losses. March CBOT wheat futures had climbed 4.75 cents to $7.04/bushel just before lunchtime Tuesday, while March KCBT wheat was unchanged at $7.315, and March MGE futures advanced 2.25 cents to $7.8925.

Despite widespread talk that the blizzard that hit the Southern Plains Monday greatly stressed feedlot cattle in that region, cattle futures slipped again Tuesday morning. It is not terribly unusual for cattle prices to rise strongly in such circumstances, since it sometimes takes animals a significant amount of time to recover from the arctic conditions. However, given that they have had weeks to adapt to winter weather, cattle may be holding up better than many would have expected at this point. Concerns about the strength of late winter beef demand may also be weighing upon the market. April cattle slipped 0.30 cents to 128.12 cents/pound in late-morning activity, while August fell 0.52 cents to 124.75. Meanwhile, March feeder cattle dove 1.42 cents to 139.37 cents/pound, and August plunged 1.52 cents to 152.62.

Lean hog futures were mixed Tuesday morning. The cash and futures markets are showing few signs of strength at this point, which is almost surely weighing upon the Chicago market. On the other hand, futures are significantly oversold in the wake of the huge losses suffered since late January, so the market seems overdue for a substantial technical bounce. April hogs had slipped 0.57 cents to 81.32 cents/pound late Tuesday morning, while June dropped 0.32 cents to 90.72.

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