Hogs diverged from gains in the other ag markets Thursday

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Today’s export powered Thursday’s belated corn rally. Corn futures proved surprisingly strong Wednesday night, but set back in early morning action. However, the market regained its upward momentum later in the day, with traders reportedly reacting to decent numbers on the weekly USDA Export Sales report. May corn settled 4.25 cents higher at $5.00/bushel Thursday afternoon, while December added 4.5 to $5.015.

An industry forecast probably boosted the soy complex. Soybean and product futures had risen significantly in overnight action, but weakened in apparent response to the export data. However, a private report cutting the firm’s Brazilian harvest forecast seemed to spur fresh gains. Oil defied the early decline in apparent response to the looming Senate vote aimed at restoring tax breaks for biodiesel producers. May soybeans climbed 13.0 cents to $14.7525/bushel at their Thursday close, while May soyoil surged 0.82 cents to 41.67 cents/pound, and May soymeal bounced $3.6 to $480.1/ton.

Renewed drought talk may have supported the wheat markets. Improved precipitation prospects for the U.S. and Australia triggered the recent drop in wheat prices. However, the latest weather reports indicate the southern Plains remain very dry, which apparently played a big role in boosting wheat futures at the various exchanges later in the day. The weekly export data looked neutral. May CBOT wheat futures ended Thursday having run up 6.75 cents to $6.76/bushel, while May KCBT wheat futures gained 5.25 cents to $7.44 and May MWE futures advanced 8.25 cents to $7.305.

Cattle futures rose from discounted levels Thursday. CME futures are trading at sizeable discounts to recent cash quotes. Thus, late wholesale firmness is suggesting the widely anticipated seasonal drop in country values may be delayed and/or prove smaller than generally believed. That seemingly explained today’s firmness in the Chicago pit. June cattle futures rallied 0.60 cents to 137.37 cents/pound at Thursday’s settlement, while December lifted 0.65 to 140.92. Meanwhile, May feeder cattle jumped 2.17 cents to 180.15 cents/pound, and August leapt 2.25 to 181.82.

Cash and wholesale weakness weighed upon the hog market. Although the hog and pork situation now seems extremely tight, many in the industry are not convinced prices can be sustained at current extraordinary highs. Wednesday’s country hog losses and Thursday morning pork weakness added to those concerns. June hog futures dove 1.25 cents to 123.55 cents/pound Thursday, but December rose 0.10 to 91.50.

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