Traders begin preparing on Wednesday for late-week reports

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Corn futures continued their recent decline Wednesday. The latest weather news was largely unchanged, but the weekly report from the Energy Information Administration (EIA) confirmed recent suspicions of poor demand from the ethanol industry. Technical and pragmatic factors probably weighed on prices. The nearby March contracts fell below support associated with its 20-day moving average (MA) one day after dipping under its 10-day MA. The looming release of the weekly Export Sales reports Thursday and the monthly Crop Production and Supply/Demand reports Friday may have prompted long liquidation as well. March corn fell 8.0 cents to $7.225/bushel at the end of the day, while December dove 10.0 cents to $5.7875.

Soybean futures declined as South American rainfall forecasts improved Wednesday. The weather models apparently changed little at midday, but the recent shift toward more favorable crop conditions in Argentina and Southern Brazil rather clearly weighed upon CBOT prices. Bulls may also have been exiting positions ahead of the forthcoming Export Sales, Crop Production and Supply/Demand reports. March soybeans closed 8.0 cents lower, at 14.875 Wednesday, while March soyoil tumbled 0.53 cents to 52.45 cents/pound and March meal slipped $1.4 cents to $437.1/ton.

Wheat futures bounced from early losses and posted firm closes today. The cause of the reversal was not readily apparent, but wire service reports suggested the recent rise in Gulf Coast premiums persuaded traders that export business has improved. Bearish traders may also have been taking profits ahead of the late week export and situational reports. The fact that March Kansas City futures bounced from the $8.00/bushel level probably prompted considerable buying as well. March CBOT wheat futures settled 4.0 cents higher, at $7.615/bushel, Wednesday afternoon, while March KCBT wheat rose 3.50 cents to $8.0975 and March MGE futures climbed 4.0 cents to $8.4475.

Live cattle futures posted substantial losses Wednesday. News that Russia might expand its previously announced restrictions upon American products seemingly undercut the market. Although the underlying Russian objections to meat with the growth promotant ractopamine involved are probably more political than phytosanitary in nature, that does not change the damage a ban on U.S. beef might do to the domestic market. April cattle closed 0.85 cents lower, at 131.45 cents/pound, while August dropped 0.75 cents to 128.12. March feeder cattle sank 0.97 cents to 147.55 cents/pound, while August dove 1.10 cents to 159.42.

Hog futures also dropped Wednesday. The latest cash news actually seemed supportive of the short-term outlook, but traders seemed to discount late-morning news of pork loin firmness in the wake of the major losses posted Tuesday afternoon. Talk of the potential damage that might be done by additional Russian restrictions on imports of American meat products may also have played a role in the CME breakdown. April hogs sank 1.45 cents to 86.25 cents/pound at the afternoon close, while June plunged 1.30 cents to 95.15.


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