Soybean futures strong Wednesday at midday

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Corn futures were rather mixed late Wednesday morning. Strength spilling over from the soybean pit seemingly boosted nearby futures. Conversely, the precipitation coming from the winter storm working its way across the Great Plains would seem to be improving prospects for the 2013 U.S. corn crop, but deferred corn futures had also risen slightly. March corn rose 1.5 cents to $6.9675/bushel around midsession Wednesday, while December rose 2.0 cents to $5.5975.

Soybean futures remained strong Wednesday morning. Traders apparently continue buying in response to disappointment with Argentine production prospects during the weeks ahead, with persistent dryness rather obviously reducing harvest potential. Others are reportedly reacting renewed buying from Chinese interests, particularly the fact that they have been buying old-crop U.S. beans. March beans were trading 16.0 cents higher, at $14.8625 late Wednesday morning, while March soyoil had fallen 0.15 cents to 52.39 cents/pound, whereas March meal gained $8.4 to $433.7/ton.

Wheat futures continued their late weather-driven decline Wednesday. Not only are large portions of the U.S. Winter Wheat Belt being blessed with substantial snowfall at this time, forecasters are expecting another system early next week. The predicted precipitation totals are not very large, but having it come in the form of snow could greatly benefit the soil underneath. The modest totals, as well as strength spilling over from the soybean pit may be limiting losses in some contracts and slightly boosting others. March CBOT wheat futures were unchanged at $7.3225/bushel just before lunchtime Wednesday, while March KCBT wheat rose 1.0 cent to $7.70, and March MGE futures climbed 1.25 cents to $8.17.

Cattle futures broke down badly Wednesday morning. Traders had reportedly come to expect another decline in country cattle prices this week, which undercut Chicago prices trading at substantial premiums. The plunge was rather surprising, especially when one considers the sustained strength exhibited by choice beef cutout so far this week. Futures prices are apparently headed even lower, but we would warn that the market could reverse sharply if/when cash values firm. April cattle plunged 1.82 cents to 127.72 cents/pound in late-morning activity, while August dove 1.62 cents to 124.97. Meanwhile, March feeder cattle had plummeted their 3.00- cent daily limit to 140.17 cents/pound, and August had fallen 2.87 cents to 153.47.

Hog futures proved quite weak again on Wednesday. The concurrent breakdown in cattle and feeder futures almost surely added to the downward pressure upon the hog/pork complex. However, the main driver of the drop probably stems from the threat to export demand represented by the Chinese demand for independent testing of U.S. pork. April hogs dropped 0.80 cents to 82.30 cents/pound in Wednesday morning action, while June dipped 0.37 cents to 91.60.

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