Technical buying seemed to boost the crop markets Tuesday night

Corn futures surged upward Tuesday, then edged slightly lower overnight. Wire service reports cited cash market firmness and signs of improving demand as powering the rally. Technicians may have joined the buying as the nearby March contract pushed above $7.00/bushel level yesterday. Given the overnight gains in soybeans and wheat, corn seems likely to move higher as well today. March corn inched 0.05 cents higher to $7.055/bushel in early Wednesday trading, while December slipped 0.25 cent to $5.56.

Soybean futures rallied early Wednesday morning after firming Tuesday. There was no real news concerning the bean market overnight, with wire services citing bargain hunting for the advance. The fact that March futures bounced from their 40-day moving average (MA) yesterday and closed just above their 10-day MA probably sparked a good deal of technically-based buying. March beans rose 6.25 cents to $14.54 in overnight action, while March soyoil bounced 0.33 cents to 49.35 cents/pound, while March meal gained $1.8 to $429.5/ton.

Ideas that demand for U.S. wheat is improving reportedly powered the Tuesday night wheat advance. The relative cheapness of the wheat market has become rather obvious with both the March CBOT corn and wheat contracts fluctuating around the $7.00/bushel lately. We will have to wait until Thursday morning to see if bullish export hopes are being fulfilled, which may mean wheat futures will remain firm today. March CBOT wheat futures climbed 6.25 cents to $7.12/bushel in electronic trading early Wednesday morning, while March KCBT wheat added 3.5 cents upward to $7.3625, and March MGE futures advanced 4.0 cents to $7.93.

Cattle futures were trading mixed to higher early Wednesday morning. Given the large jump posted by cutout values after the Tuesday afternoon close, the lack of futures strength was surprising. For example, after having worked progressively lower from early January through mid-February, choice grade cutout jumped 1.42 cents to 184.51 cents/pound. That represents its highest quote since January 31. Select cutout spiked 2.43 cents. We tend to expect the cattle market to continue firming today. However, potential packing industry closings due to the Federal government sequester may weigh upon prices. April cattle were unchanged at 129.30 cents/pound in early trading, while August slipped 0.02 cents to 125.52. Meanwhile, March feeder cattle dipped 0.12 cents to 141.05 cents/pound, and August edged 0.05 cents lower to 154.35.

Lean hog futures declined in overnight trading, possibly in reaction to the idea that the Federal government sequester will not be averted, thereby potentially forcing packing industry shutdowns during the days and weeks ahead. Ongoing losses by the CME lean hog index may also be weighing on the Chicago market, despite signs of stabilization at direct country markets. April hogs skidded 0.42 cents to 81.15 cents/pound in early Wednesday electronic activity, while June lost 0.27 cents to 91.05.

Despite a dearth of news cotton futures spiked upward Tuesday night. One might reasonably argue that the equity strength exhibited yesterday and again in overnight trading is encouraging those looks for sustained economic strength during the coming weeks and months. Others may also be anticipating resurgent Chinese buying, although there seemed to be no pertinent news emerging from that country either. May cotton jumped 0.94 cents to 82.77 cents/pound early Wednesday morning, while December climbed 0.40 cents to 83.22.

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