Markets are quiet ahead of USDA reports Thursday

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Corn futures were mixed to lower Wednesday morning, with wire services citing widespread anticipation of a huge acreage estimate on the Thursday morning USDA Prospective Plantings report; the average pre-report forecast points to the largest plantings since 1936. The grain and soy markets seem likely to fluctuate little prior to the report release tomorrow morning at 11:00 AM. May corn rose 1.5 cents to $7.3175/bushel early Wednesday morning, while December slipped 1.25 cents to $5.6975.

News that Oil World had cut its forecasts for the ongoing Brazilian and Argentine soybean harvests boosted that market Tuesday. The upward momentum seemed to persist overnight, with renewed talk of Brazilian logistical problems also appearing supportive. Still, the CBOT futures are likely to proving relatively stagnant until the Thursday morning release of the USDA Grain Stocks and Prospective Plantings reports. May soybeans gained 4.25 cents to $14.52/bushel in early Wednesday morning trading, while May soyoil climbed 0.17 cents to 50.99 cents/pound, and May meal edged $1.6 higher to $421.8/ton.

Talk that some west Texas wheat suffered frost damage over the weekend seemed to boost wheat futures Tuesday, but prices were decidedly mixed early Wednesday morning. Nearby CBOT wheat rose slightly, which suggests concerns about short-term tightness supported values. The KC and MGE markets declined slightly overnight; which may reflect the improved moisture situation across the Great Plains and Midwest. We do not expect much price volatility prior to the release of the USDA reports Thursday morning. May CBOT wheat futures inched 1.5 cents higher to $7.33/bushel in overnight electronic trading, while May KCBT wheat and May MGE futures were unchanged at $7.685 and $8.105, respectively.

Cattle futures proved generally weak again Tuesday, with CME traders seemingly having little confidence in the short-term outlook at this point. That appeared to be the case again early Wednesday morning, with only the nearby April contract proving able to rise. Increasing sales of animals placed as calves last fall may also be weighing upon the market at this juncture. April cattle advanced 0.05 cents at 126.00 cents/pound in early morning price action, while August lost 0.15 cent to 122.47. Meanwhile, April feeder cattle futures fell 0.27 cents to 138.32 cents/pound, and August declined 0.35 cents to 147.45.

Sizeable cash gains boosted CME lean hog futures Tuesday, but they gave back a major portion of those gains last night. Slipping wholesale prices may have weighed upon the market, but the main cause of the drop may have been the release of wire service surveys ahead of the Thursday afternoon Hogs & Pigs report from the USDA. Those indicated that the hog industry was still expanding slightly in the face of high feed costs and recent producer losses. April hogs slid 0.37 cents to 79.12 cents/pound in pre-dawn Wednesday action, while June skidded 0.65 cents to 90.42.

China made news again in the cotton market Tuesday night, when it announced it will increase its sales from state reserves during April. Although few details were given by Chinese government officials, they did claim they would accelerate sales of high quality cotton for the domestic industry to use next month. That rather obviously implies reduced Chinese demand on the global cotton market. May cotton dropped 0.54 cents to 87.49 cents/pound early Wednesday morning, while December lost 1.40 cents to 85.83.

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