Grain markets move generally lower Thursday morning

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Corn futures followed soybean futures lower Thursday morning. The yellow grain market reacted weakly to the mixed result of the weekly USDA Export Sales report. That was not very surprising, since the latest figure essentially matched the poor results averaged over the previous four weeks. March corn had slipped 3.0 cents to $6.925/bushel by late morning, while December had dipped 3.75 cents to $5.605.

Soybean futures moved decidedly lower again Thursday, with the weekly USDA Export Sales report having a great deal to do with the drop. The total sales figure, at 990,700 tonnes fell within the range of pre-report forecasts, but the fact that 2012-13 commitments actually declined by 109,000 tonnes obviously implied a poor sale pace last week. March beans were trading 8.50 cents lower, at $14.145 late Thursday morning, while March soyoil had declined 0.09 cents to 51.57 cents/pound, and March meal slumped $2.9 to $405.2/ton.

Wheat futures dropped despite a supportive result on the export report. Industry analysts were reportedly looking for a result in the 275,000-400,000 tonne range, whereas it came in at 651,700 tonnes. The weak reaction was probably influenced by the concurrent drop in soybeans, but wheat traders may also have been reacting to the fact that 2012-13 sales actually reached just 203,600. March CBOT wheat futures had fallen 8.0 cents to 7.275/bushel just before lunchtime, while March KCBT wheat sank 9.25 cents to $7.71, and March MGE futures dropped 8.0 cents to $8.15.

News that country cattle continued trading weakly Thursday morning seemingly dragged live cattle futures to their lowest levels since last summer, but they staged an impressive rebound around midsession. The reason for the bounce was not obvious, but it very likely had a major technical component since the market was oversold on a short-term basis. We suspect traders were also hearing talk of wholesale firmness as well. April cattle were trading just 0.35 cents lower, at 129.05, after having plunged to 127.60 cents/pound around mid-morning. August had edged 0.07 cents higher to 125.35 by late morning. Meanwhile, March feeder cattle had bounced 0.42 cents higher, to 141.85 cents/pound, and August had jumped 1.02 cents to 155.62.

Hog futures dropped substantially Thursday morning. The Wednesday afternoon wholesale report, which stated pork cutout 2.68 cents lower almost surely powered the breakdown, but early cattle losses probably weighed upon the market as well. The drop seemingly confirms what now looks like a bear flag on the April futures chart, thereby suggesting a bearish follow-through to the downside. April hogs dove 1.12 cents to 84.67 cents/pound in Thursday morning action, while June fell 1.02 cents to 93.12.

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