Grain markets close lower on Thursday

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Corn futures for the 2012/13 crop year closed lower on Thursday. Futures are consolidating after the recent sharp decline. Fund selling pressure has eased, but could return with funds still heavily net long corn futures. Price charts still have a negative bias. Even so, cash movement is slow. The Gulf basis is up 6-10 cents for Nov/Dec. Weekly export sales to be released on Friday AM are expected to total 8-10 million bushels. Weekly ethanol production was down only fractionally from the previous week at 824k barrels per day. December corn futures closed 4 1/2 cents lower at $7.21 1/4.

Soybean futures closed lower on Thursday with the January futures surrendering gains of the past two days. At the close, January was down 17 cents at $14.02. New-crop November lost 4 1/2 cents to close at $12.70 3/4. December soybean meal fell back $5.50 to close at $430.50. Soyoil lost 21 points to close at 47.46 cents for December. Despite news from USDA of sales of another 32,000 tonnes of soybean oil to a foreign buyer, the market resisted rally attempts. Recent weather developments in Brazil are viewed as favorable for their next crop. Economic worries about the so-called fiscal cliff hounded commodity buying interest in general.

Wheat prices were not been able to hold on to early gains and closed lower on reports that U.S. wheat is still not competitive with competing suppliers and that the gap between export sales to date and where they “should” be by now will persist when USDA releases its holiday-delayed weekly export sales report tomorrow morning. Multiple reports that Strategie Ltd., a European consulting firm, was forecasting global wheat ending stocks substantially below USDA’s current estimate (159 million tonnes vs. 170 million for USDA) were widely disseminated among wire services, but had little impact on pervasive trader bearishness. At the close, CBOT December was 3 ¼ lower at $8.45 ½; KCBT December 2 ¾ lower at $9.03 ½; MGE December 2 ½ lower at $9.30 ¾.

Live cattle futures were higher on Thursday. No cash bids have been reported. Processors remain on the sidelines. Beef prices were lower at midday. Cattle futures were held in check by weakness in the stock market. The fiscal cliff looms. The monthly Cattle on Feed report will be out on Friday. The report is expected to show a sharp decline in placements during October with cattle on feed down 4%-6% from a year ago. December CME cattle futures closed 37 cents lower at 125.42.

Lean hog futures closed mixed. Futures bounced back from early losses. Cash hogs were steady to lower on Thursday. Pork prices remain under pressure. The cutout was down 2.55 on Wednesday to $81.57. Futures bounced back from early losses. The overall uptrend in hog futures remains intact. December CME lean hogs settled 3 cents lower at $80.07.

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