Grain markets moved mostly lower again Wednesday

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Corn futures rebounded significantly from overnight losses Wednesday morning. Improving weather forecasts for Argentina and the U.S. Southern/Central Plains have rather obviously weighed upon prices lately. However, the bounce from early lows came despite a general lack of supportive news, which suggests the market was substantially oversold. Short position holders may be taking profits on previously established positions prior to the Thursday morning release of the weekly USDA Export Sales report. March corn edged 0.75 cent lower, to $6.955/bushel at the daily close, while December had gained 1.25 cent to $5.6425.

Soybean futures had also declined Tuesday night, then staged a modest comeback during the Wednesday pit session. There seemed to be no obvious reason for the bounce, especially with the latest South American forecasts appearing very supportive of a larger Argentine soy harvest. We suspect news that domestic processors were slowing their purchases on diminished demand for soymeal played a role in the bounce, especially with soybean oil leading the way higher. Calendar spreading in the beans and between the products also seemed very prevalent. March beans ended Wednesday trading 2.25 cents higher, at $14.23 cents/pound, while March soyoil surged 0.56 cents higher to 51.66 cents/pound, and March meal slipped $2.2 to $408.1/ton.

Despite much improved precipitation forecasts for the Winter Wheat Belt, wheat futures posted an impressive recovery from early lows Wednesday. Traders may be anticipating a bullish result on the weekly USDA Export Sales report scheduled for release Thursday morning. Some wire service sources contend that U.S. wheat at current prices is very competitive on the international market, whereas other suggested bulls were bargain-hunting in the market. March CBOT wheat futures had gained 3.5 cents to 7.355/bushel when the closing bell rang Wednesday, while March KCBT wheat rose 2.5 cents to $7.8025, and March MGE futures climbed 8.25 cents to $8.23.

CME live cattle continued their recent decline Wednesday. The two-cent cash losses suffered Tuesday almost surely weighed upon the market, although bulls are likely hoping for a sustained rise in beef values to aid their cause. That is not assured, since beef packers are reportedly still posting large losses on each animal they process. Such conditions are not conducive to improved fed cattle demand. April cattle tumbled 0.55 cents to 129.40 cents/pound late Wednesday morning, while August had sank 0.85 cents lower to 125.27. Meanwhile, March feeder cattle plunged 1.90 cents to 141.35 cents/pound, and August plummeted 2.47 cents to 154.60.

Hog futures were generally mixed Wednesday. The discounts built into the February future probably spurred some buying before its Thursday expiration, in those contracts, whereas the negative implications of the recent cash/wholesale decline apparently weighed upon spring futures once again. The swine market has seemingly reached a pivotal point, with the spring/summer contracts potentially open to significant moves in either direction from this point. April hogs settled 0.20 cents lower, at 85.80 cents/pound, while June had lost 0.10 cents to 94.15.

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