Grain markets weak again Thursday

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Corn futures continued their Wednesday night slide Thursday. The persistent weakness was quite surprising when viewed within the context of the weekly USDA Export Sales report. It stated both 2012/13 and 2013/14 sales totals above forecast ranges, which in many circumstances might give the yellow grain market a significant boost. Wire service reports blamed growing talk of Chinese problems with a new strain of bird flu for the bulk of the decline, citing worries about future feed demand strength. May corn fell 12.25 cents to $6.30/bushel late Thursday, while December actually inched 0.5 cents higher to $5.40.

The weekly USDA Export Sales report seemed quite supportive of soybean futures Thursday, but CBOT prices had declined rather substantially by the afternoon close. Talk of reduced Chinese soybean and meal demand due to a new bird flu strain reportedly weighed upon prices. The improving South American situation was probably a bearish factor as well, but we would also point out that forecasts for persistently wet, cold weather over the Corn Belt may already be shifting planted acreage from corn to soybeans this spring. May soybeans dropped 8.25 cents to $13.72/bushel at its Thursday close, while May soyoil dove 0.60 cents to 48.55 cents/pound, and May meal lost $0.9 to $397.1/ton.

Wheat futures were quite mixed Thursday, with the Chicago and Minneapolis markets easily outperforming those in Kansas City. Talk of strong Chinese buying reportedly powered the Wednesday wheat rally, but a lack of confirmation of such dealings apparently sparked the late bearish reversal. We suspect steadily improving crop prospects are weighing upon new crop futures. May CBOT wheat futures lost 4.0 cents to $6.94/bushel at their Thursday afternoon settlement, while May KCBT wheat sank 13.5 cents to $7.195 and May MGE futures slid 5.0 cents to $7.865.

Belated news that country cattle had traded Wednesday at levels quite comparable with those seen last week seemingly weighed upon CME cattle futures Thursda. Fed cattle reportedly traded at 128.00 cents/pound in the Panhandle and Kansas regions yesterday, thereby matching higher quotes from last week. Most traders were probably expecting a weekly rise, as well as sustained wholesale strength this morning. Beef cutout values were only slightly changed from Wednesday. June cattle slumped 0.85 cents to 122.35 cents/pound at their Thursday settlement, while December tumbled 0.50 cents to 129.05. May feeder cattle futures lost 0.52 cents to 145.92 cents/pound, and August declined 0.67 cents to 152.82.

Hog futures were mixed again Thursday. News that the CME lean hog index, which futures cash-settle against, is moving rapidly higher very likely boosted the expiring April contract. Weakness spilling over from the cattle pit seemed to depress deferred futures, but a big jump in fresh pork belly prices could offer considerable support over the short term. The lightly traded May contract dropped 1.00 cent to 89.15 cents/pound at its Thursday closing, while June slipped 0.45 cents to 92.02.

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