Conab, the Brazilian equivalent of the USDA, published its latest estimates of its forthcoming 2013 crops overnight. It slightly increased its predicted corn crop to 72.2 million tonnes, which would be only slightly below the 73.0 million-tonne record set last year. The modest nature of that shift, as well as the moderate upward momentum developed over the past two days may account for the fact that CBOT corn futures were virtually unchanged in Wednesday morning electronic trading. Traders are very likely reluctant to make many fresh commitments to the grain and soy complexes ahead of the Friday release of numerous USDA reports, since futures have reacted quite strongly to the January data in each of the past few years. March corn was unchanged at $6.88 3/4 per bushel Tuesday night, while December had slipped 1 3/4 cents to $5.76.

Soybean futures were decidedly mixed in early morning trading, despite what might be construed as a bearish report from Conab. The Brazilian department of agriculture stated its forthcoming soybean crop at 82.7 million tonnes, which would represent a new record for that country. However, the latest figure is only slightly above it previous forecast, which probably explains the mixed CBOT reaction. Traders may also have been somewhat encouraged by palm oil gains in Singapore overnight. March beans rose 1/4 cent to $13.86 3/4 in pre-dawn trading and March soyoil advanced 0.26 cents to 49.79 cents/pound, but March meal declined $1.1 to $409.8/ton.

Industry insiders have recently argued that U.S. wheat is the cheapest available to the international market, but prices declined persistently during December and early January. Indeed, overnight news that Ukraine is expecting a 20% annual increase in its 2013 wheat crop seemed likely to exert renewed downward pressure upon American prices. However, a wire service story released early this morning suggested that China has emerged as a major buyer of U.S. and Canadian wheat lately and that it will continue buying through early spring. That probably explains the firmness exhibited by wheat futures this morning. March CBOT wheat rose 1 1/4 cents to $7.51 3/4, while March KCBT wheat gained 1 cent to $8.09 3/4 and March MGE futures edged 1/4 cent higher to $8.45 1/2.

CME live cattle traders had to adjust Tuesday to news that fed cattle were trading at steady prices in the Panhandle region and in Nebraska. Given the habit of producers and packers to wait until Friday to get something done, the early-week activity could hardly have been more surprising. That almost surely explains the weakness exhibited by the Chicago market yesterday. Still, if the belated advance posted by choice beef cutout Tuesday sparks a general wholesale advance over the next 2-3 weeks, the cattle market seems likely to resume its long-term bullish move. February cattle edged 0.10 cents higher to 132.65 cents/pound overnight, while April inched upward by one tick to 136.32.

Despite widespread expectations for a substantial seasonal rally through January and early February, both cash hog and wholesale pork values suffered moderate losses Tuesday. Losses at the direct markets west of the Mississippi River were particularly noteworthy, as was the general decline suffered by most pork cuts. The ham market was the lone gainer Tuesday. Given the bullish environment and the premiums already built into CME futures, it was not terribly surprising to see futures drop significantly in Tuesday night trading. February hogs seem set to begin the Chicago pit session 0.62 cents lower at 85.72 cents/pound, while the June contract is down 0.85 cents to 98.05.

The chief cotton analyst for global trader Louis Dreyfus publicly lamented the ongoing Chinese buying program overnight and blamed it for distorting the international cotton market. He claimed their buying spree was greatly encouraging Chinese production while causing its domestic millers to switch to cheaper synthetic fibers. And while the situation is unlikely to change in the near future, it raises the real possibility of overhanging Chinese inventories for some time. Cotton prices could be capped in such an environment. Nevertheless, ICE futures rose moderately in Wednesday morning activity. March cotton futures climbed 0.10 cents to 75.22 cents/pound, while December advanced 0.37 cents to 79.00.