Grain markets posted mixed reactions to the export data

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Corn futures turned upward in response to the Thursday morning USDA Export Sales report. Both the 282,300-tonne total for the 2012/13 crop year and the 371,000-tonne 2013/14 result topped forecasts, thereby implying the underlying export situation remains very tight. The May future continues struggling to top its 40-day Moving Average; that could be pivotal to the short-term outlook. May corn rose 5.75 cents to $716.0/bushel around midsession Thursday, while December gained 3.0 cents to $5.58.

Although the old-crop results were not that bad, soybean traders were apparently disappointed by the Export Sales report. The USDA stated 2012/13 sales at 657,700 tonnes, which topped forecasts reportedly averaging around 400,000. Conversely, 2013/14 sales totaled just 126,000 tonnes, thereby falling dramatically below expectations. The idea that huge South American supplies will stifle new crop U.S. exports may be depressing the market. May soybeans had fallen 12.5 cents to $14.345/bushel late Thursday morning, while May soyoil dipped 0.28 cents to 49.24 cents/pound, and May meal dropped $4.5 to $424.4/ton.

Wheat futures rallied after the Export Sales report, since the stated 2012/13 figure easily topped expectations. The 888,500-tonne total smashed forecasts around 500,000 tonnes and exceeded the week-prior figure by 44%. When combined with recent talk of resurgent domestic demand, these results seem very supportive of old-crop price prospects. May CBOT wheat futures jumped 12.5 cents to $7.225/bushel as lunchtime loomed Thursday, while May KCBT wheat surged 9.5 cents to $7.4725, and May MGE futures climbed 4.5 cent to $8.00.

Cattle futures moved lower Thursday as traders worried about the outcome of cash trading this week. They may also have been reacting to talk of declining cutout values after the sustained gains of the past two weeks. The rumors were proven correct later in the morning; cutout values were stated 0.25-0.73 cents lower, with choice cuts leading the way downward. The futures losses may also set a negative tone for the cash markets. April cattle fell 0.57 cents to 127.95 cents/pound in late Thursday-morning action, while August lost 0.42 cents to 124.45. Meanwhile, April feeder cattle dove 1.02 cent to 141.70 cents/pound, and August plunged 1.40 cents to 150.45.

Preliminary reports of diving direct market prices in the Western corn Belt dragged CME lean hog futures downward Thursday morning. Although the morning reports in question often prove quite inaccurate, the size of the reported losses was not at all encouraging. The midday wholesale report was uninformative. The concurrent drop by cattle futures probably exaggerated the swine losses as well. April hogs slid 0.40 cents to 80.252 cents/pound around lunchtime Thursday, while June slid 0.40 cents to 89.67.

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