Optimism about exports sparks crop market gains on Thursday

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Corn futures remained strong Thursday, thereby seeming to reflect growing optimism about short-term export prospects. The weekly USDA Export Sales report apparently confirmed bullish expectations, with the actual sales figure, at 512,600 tonnes topping forecasts ranging between 350,000 and 450,000. It will be interesting to see if bulls can sustain the move into the weekend, since considerable optimism about demand prospects had already been built into the market. March corn surged 10.0 cents to $7.195/bushel Thursday afternoon, while December rose 3.25 cents to $5.57.

Soybean futures also responded well to the weekly Export Sales report. Traders were reportedly anticipating a result in the 750,000 to 1,000,000-tonne range, but the USDA stated the net for last week at 1,171,000 tonnes. Growing talk that Brazilian infrastructure problems are proving even worse than previously expected may also be boosting U.S. prices. However, a surprisingly weak estimate of ongoing soybean oil exports dragged that market downward late in the day, which may also have weighed upon soybean values. March beans settled 16.75 cents higher, at $14.7425/bushel Thursday, whereas March soyoil fell 0.37 cents to 48.90 cents/pound; March meal climbed $5.5 to $434.8/ton.

Wheat futures rallied on strong export news Thursday morning but closed rather weakly. The USDA stated the net sales total for last week at 524,800 tonnes, while traders were looking for something between 400,000 and 600,000 tonnes. The fact that about 75% of the total was old crop wheat probably encouraged bulls. However, bulls proved unable to push nearby futures prices above their respective 10-day moving averages, which may have prompted technical selling. March CBOT wheat futures ended Thursday 3.25 cents higher, at $7.0775/bushel, while March KCBT wheat rose 12.75 cents to $7.47, and March MGE futures soared 12.5 cents to $7.9975.

Cattle futures were mixed to higher Thursday, with wholesale strength likely encouraging buying. Cutout values climbed for the fourth time this week, thereby suggesting that beef packers will be more willing to pay up for cattle this evening or Friday than they have been in a while. Indeed, bulls are rather obviously expecting a sustained cash rally over the next two months, since the April future ended the day about seven cents premium to the cash prices posted the past two weeks. That premium could limit its upside potential. April cattle edged 0.02 cents lower to 129.85 cents/pound as the CME pit session ended, while August gained 0.20 cents to 125.75. Meanwhile, March feeder cattle climbed 0.55 cents to 142.00 cents/pound, while August rallied 0.30 cents at 154.87.

Talk that the cash hog markets were firming seemingly supported hog futures Thursday morning. Country prices had clearly dropped sharply since late January, but the Iowa-Southern Minnesota region posted its first increase in several days Thursday. The recent hog price reductions and modest increases in wholesale values have pushed pork packing margins solidly into the black. Thus, improved packer demand would certainly be a key ingredient in a late-winter rebound. April hogs settled unchanged at 81.00 cents/pound Thursday afternoon, while June had risen 0.25 cents to 91.47.

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