Soybeans led the crop markets higher Tuesday at midday

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Corn futures again followed soybeans higher Tuesday morning. The yellow grain market is deriving some support from persistent supply tightness, but strength spilling over from soybeans is almost surely providing much of the power pushing corn prices higher. Strong export sales are apparently underlying the general crop market strength. May corn surged 7.25 cents to $7.105/bushel late Tuesday morning, while December climbed 3.5 cents to $5.5375.

Soybean futures spiked upward in response to the latest export news from the USDA. The agency announced that exporters had sold 330,000 tonnes for 2012/13 delivery to unknown destinations and that they had sold 345,000 tonnes to China for 2013/14 delivery. This certainly suggests export customers are coming to the U.S. due to Brazilian problems getting its huge crop to ports and onto ships. May soybeans had jumped 8.75 cents to $14.7075/bushel around mid-session Tuesday, while May soyoil advanced 0.15 cents to 50.42 cents/pound, and May meal gained $2.3 to $436.0/ton.

The big soybean rally pulled wheat futures upward as well. The rise came despite quickly improving prospects for 2013 U.S. wheat production, especially with recent Southern Plains snowstorms being followed by the system tracking across the Northern Plains this week. The USDA also resumed its weekly crop progress reports for the Winter Wheat Belt Monday, showing improvements in both Oklahoma and Kansas from the previous report. Such reports could limit short-term wheat gains. May CBOT wheat futures bounced 4.0 cents to $7.065/bushel by late Tuesday morning, while May KCBT wheat gained 6.5 cents to $7.445, and May MGE futures rose 3.75 cents to $7.96.

Cattle futures tried to build upon their recent advance, but turned lower by late Tuesday morning. Traders may simply have taken a pragmatic approach to the market, since nearby futures have not reacted very well to the big cash and wholesale price gains posted over the past week. Historically, a market that responds weakly to bullish news is often viewed as being vulnerable to a reversal. April cattle slipped 0.20 cents to 130.12 cents/pound in late-morning activity, while August dipped 0.35 cents to 125.57. Meanwhile, April feeder cattle dropped 0.62 cents to 144.10 cents/pound, while August fell 1.10 cents to 153.45.

Hog futures were slightly lower late Tuesday morning after having bounced from early lows. Concerns about the impact of the Federal government sequester, specifically the planned furloughs of meat inspectors at packing industry plants may have depressed prices to start the week. However, news that those furloughs might not occur until the July-September quarter seemed to spark a mid-morning rebound. April hogs slid 0.15 cents to 80.15 cents/pound late Tuesday morning, while June slumped 0.22 cents at 90.35.

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