Midwest crop markets staged a comeback Wednesday morning

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Corn futures rebounded significantly from overnight losses Wednesday morning. Improving weather forecasts for Argentina and the U.S. Southern/Central Plains has rather obviously weighed upon prices lately. However, the bounce from early lows came despite a general lack of supportive news, which suggests the market was substantially oversold. Short position holders may be taking profits on previously established positions prior to the Thursday morning release of the weekly USDA Export Sales report. March corn had edged 0.75 cent higher to $6.97/bushel by late morning, while December had gained 0.25 cents to $5.6325.

Soybean futures had also declined Tuesday night, then staged a modest comeback after sunrise. There seemed to be no obvious reason for the bounce, especially with the latest South American forecasts appearing very supportive of a larger Argentine soy harvest. We suspect news that domestic processors were slowing their purchases on diminished demand for soymeal played a role in the bounce, especially with soybean oil leading the way higher. March beans were just 3.50 cents lower, at $14.1725 late Wednesday morning, while March soyoil had risen 0.08 cents to 51.19 cents/pound, and March meal slipped $2.6 to $407.7/ton.

Despite much improved precipitation forecasts for the Winter Wheat Belt, wheat futures posted an impressive recovery from overnight lows Wednesday morning. Traders may be anticipating a bullish result on the weekly USDA Export Sales report scheduled for release Thursday morning. Wire service sources contend that U.S. wheat at current prices is very competitive on the international market. March CBOT wheat futures had gained 4.25 cents to 7.3625/bushel just before lunchtime, while March KCBT wheat rose 3.25 cents to $7.8125, and March MGE futures climbed 5.0 cents to $8.21.

CME live cattle continued their recent decline Wednesday morning. The two-cent cash losses suffered Tuesday are almost surely weighing upon the market at this juncture, although bulls may be hoping the modest Tuesday afternoon rise in beef cutout values will aid their cause. They have to hope for much more of the same, since industry insiders indicate beef packers are still posting large losses on each animal they process. That is not conducive to improved fed cattle demand. April cattle tumbled 0.67 cents to 129.27 cents/pound late Wednesday morning, while August had skidded 0.47 cents lower to 125.65. Meanwhile, March feeder cattle were down 0.85 cents to 142.42 cents/pound, and August was trading 1.60 cents lower, at 155.47.

Hog futures were generally mixed to higher in early Wednesday action. Discounts built into nearby futures exemplify the bearish expectations held by many traders at this point. On the other hand, the discounted prices also make it difficult for bears to force the market low. The fact that the February future remains well below the CME index (now estimated at 88.96) just before its noon Thursday expiration may be tending to pull the whole futures complex higher. April hogs had risen 0.17 cents to 86.17 cents/pound just before the lunch hour, while June had gained 0.10 cents to 94.35.

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