Grain markets widely mixed Tuesday at midday

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Corn futures turned decisively lower Tuesday morning. Weather forecasts for the dry areas of Southern Brazil and Argentina were largely unchanged Monday night, which left traders with little fresh grist for their proverbial mills. They reportedly focused upon the poor Export Inspections figure posted Monday and are now apparently anticipating a depressed result on the weekly Export Sales report Thursday morning. March corn fell 7.25 cents to $7.27/bushel just before the lunch hour, while December slid 5.75 cents to $5.88.

Soybean futures fell as traders prepared for the CBOT pit session Tuesday morning, but rebounded by late morning. No substantial changes were made to weather forecasts for the crop growing regions of Argentina and Southern Brazil, which suggests other factors were in play. Wire service reports suggested having the March contract fail to top the $15.00/bushel level Monday and again overnight opened the door to a short-term technical setback. The late-morning bounce was equally impressive. March soybeans were trading 2.25 cents higher, at 14.91 late Tuesday morning, while March soyoil had slipped 0.05 cents to 53.00 cents/pound. March meal had inched upward $1.5 cents to $435.8/ton.

Wheat futures tumbled in Tuesday morning market action. News that ending-2012 Canadian stockpiles topped many forecasts might easily have boosted the markets, which makes the price drop that much more telling. On the other hand, late forecasts suggest Kansas will be blessed with significant rainfall next week, which probably caused futures price to drop. The drop implies more of the same during the days just ahead. March CBOT wheat futures had fallen 6.0 cents to $7.57 per bushel by late Tuesday morning, while March KCBT wheat had plunged 9.0 cents to $8.08 and March MGE futures declined 4.75 cents to $8.4225.

Cattle futures backed away from sizeable overnight gains later in the morning. We continue thinking widespread expectations for a significant cash price increase later in the week are supporting the market. The fact that producers posted few delivery notices against the expiring February future Monday afternoon seemingly confirms that belief. April cattle were unchanged at 132.27 cents/pound just before lunchtime, while August had edged 0.02 cents lower to 128.87. March feeder cattle had advanced 0.60 cents to 149.47 cents/pound in apparent response to the late grain weakness, while August had risen 0.30 cents to 160.85.

Hog futures continued their late slide Tuesday morning. Despite a history of seasonal strength at this time of year, the cash hog and wholesale pork markets have not been cooperating with bulls early this week. Reports of Tuesday morning cash slippage and the large Monday afternoon drop in fresh pork belly values seemingly bode ill for short-term prospects. Conversely, the discount currently built into nearby futures may limit their downside potential. April hogs had dropped 0.67 cents to 87.67 cents/pound by mid-session, while June skidded 0.75 cents to 96.35.

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