Grain markets respond to disappointing Export Sales report

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Corn futures continued their recent decline again Thursday, with the weekly Export Sales figure apparently doing well to meet weak industry expectations. The USDA stated the net result at 160,400 tonnes in the lower third of pre-report forecasts and well below the preceding figure. This suggests export demand remains poor. March corn fell 10.0 cents to $7.125/bushel in late-morning trading, while December dropped 11.0 cents to $5.6775.

Soybean futures proved decidedly mixed Thursday morning. Strong export sales for 2012-13 delivery probably boosted the nearby contracts for beans and products. However, weaker prospects for 2013-14 shipment may have undercut deferred futures. Moreover, the looming South American harvest also promises to weaken the U.S. market. March soybeans had inched up 1.5 cents to 14.89 late Thursday morning, but March soyoil had dipped 0.42 cents to 52.03 cents/pound, while March meal had advanced $1.7 higher to $438.8/ton.

The Thursday morning Export Sales report stated the net weekly wheat total at 300,800 tonnes, which essentially matched the lower end of industry forecasts. That result seemingly depressed wheat futures later in the morning, although traders would very likely point to concurrent losses in corn and deferred soybean futures as well. Slightly improved forecasts for Southern Plains moisture may have exerted additional downward pressure. March CBOT wheat futures had fallen 6.25 cents to $7.5525/bushel around midsession, while March KCBT wheat had slumped 8.25 cents to $8.015 and March MGE futures lost 4.25 cents to $8.405.

Nearby February cattle futures rose slightly Thursday morning, which probably reflected general industry expectations for a rise in cash values later this week. However, the market consensus seems much less favorable toward spring-summer prospects in the wake of recent wholesale losses. Put simply, beef packers may prove less than willing to pay up for fed cattle if beef values do not rebound substantially from recent losses. April cattle edged 0.07 cents lower to 131.37 cents/pound just before lunchtime Thursday, while August had skidded 0.10 cents to 128.02. Meanwhile, March feeder cattle sank 0.45 cents to 147.40 cents/pound, and August tumbled 0.42 cents to 159.00.

Hog futures also moved generally lower before noon Thursday. The expiring February contract proved an exception, posting a modest rise due to its discount to the CME lean hog index (which futures cash-settle against). However, the early-weak breakdown in fresh pork values, especially the losses suffered by pork bellies and loins, kept downward pressure upon the deferred contracts. This may continue until traders believe pork prices have stabilized. April hogs had slipped 0.17 cents to 86.07 cents/pound by mid-session, while June moved 0.37 lower to 94.77.


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