The Thursday morning Export Sales report was not particularly supportive of the short-term corn outlook, since the USDA result, at about 107,000 tonnes came in at the lower end of the forecast range (between 100,000 and 300,000 tonnes). Nevertheless, CBOT futures held up well in the face of the poor sales news and sustained much of their Wednesday night gains throughout the Thursday session. It now seems rather clear that many participants in the corn pit are evening up positions ahead of the Friday morning USDA Crop Production and Supply/Demand reports. Whereas many were seemingly winding up bullish positions last week, we suspect traders are now covering previously established short positions in case the data proves bullish, as was often the case last summer and fall. March corn climbed 4 cents to 6.98 1/4 Thursday, while December edged 2 1/2 cents higher to $5.84 1/4.

Soybean futures reacted rather well to the weekly export data, but that news was quickly overshadowed by the ensuing announcement that private exporters had reported 587,500 tonnes of bean sales to China and unknown destinations over the past few days. The numbers weren’t especially bullish, since some was set to be shipped in the 2013-14 crop year and a portion was optional origin, but the sizeable total probably impressed traders. However, the CBOT market reversed rather sharply around mid-morning, possibly due to the concerted exit of traders unwilling to hold long positions through the release of the Friday USDA data. We saw no news ostensibly behind the drop. Ultimately, we expect continued choppy trading until that information is released. March beans fell 7 1/2 cents to $13.78/bushel at the Thursday afternoon close, whereas March soyoil advanced 0.22 cents to 49.86 cents/pound and March meal slumped $5.6 to $404.0/ton.

The USDA Export Sales data also proved rather negative for wheat futures, since the 264,000-tonne result fell short of the anticipated 325,000-402,500 tonne range. However, that news was followed soon thereafter by an announcement that Egypt had bought 115,000 tonnes of U.S. and Canadian wheat to be shipped next month. This was not unexpected, but it may have reinforced ideas that recent price losses have rendered North American product very attractive to international buyers. Futures rallied strongly in response, but later set back in concert with the drop suffered by soybeans. We tend to expect a great deal of position squaring over the next 24 hours, since the USDA will release its first take on domestic winter wheat plantings on the Crop Production report. March CBOT wheat ended the day 1/2 cent lower at $7.45 1/4 per bushel, while March KCBT wheat dropped 4 1/4 cents to $7.97 and March MGE futures slipped 1 1/4 cents to $8.39 1/4.

Prospects for continued short-term weakness seemingly weighed upon CME live cattle futures Thursday, with traders apparently expecting flat early-week cash activity and the Wednesday Chicago breakdown to drag country prices lower later today and/or tomorrow. It would be easy to assume futures are headed lower, since the nearby contracts fell below their closely-watched 40-day moving averages yesterday, but they appear to be trying to hold above the confluence of their 50 and 100 moving averages, so a bearish follow-through is not guaranteed. February cattle finished unchanged at 131.55 cents/pound Thursday afternoon, while April dipped 0.27 cents to 135.10.

Although anecdotal cash market reports implied country hog prices were slipping again Thursday morning, CME lean hog futures traded in a mixed fashion. This very likely reflects some ideas that their Wednesday breakdown was overdone, but technicians could also argue that it represents a reaction to their relative chart positions. That is, the nearby February future remains well above its December lows, whereas the April and June contracts have fallen to their lowest levels since October. Thus, they seem more vulnerable to sustained short-term weakness, especially since the industry is now looking for larger spring-summer hog supplies than was the case prior to the December Hogs & pigs report. February hogs settled 0.40 cents higher, at 84.60 cents/pound Thursday, while its June counterpart rose 0.35 cents gain to 96.55.