Traders began looking forward to USDA reports

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Corn futures moved sharply lower Wednesday afternoon in apparent reaction to improving U.S. crop prospects and renewed concerns about export prospects. The inability of bullish soybean traders to sustain early gains may also have contributed to the yellow grain breakdown. Traders seemed particularly reluctant to sponsor fresh long positions ahead of the Thursday morning Export Sales report and the Friday morning release of the USDA WASDE report. May corn dipped 20.50 cents to $6.885/bushel at its Wednesday close, while December slid 7.75 cents to $5.4425.

Soybean futures put in a decidedly mixed showing Wednesday, with the nearby contracts dipping while the deferreds rose slightly. The underlying weakness may have stemmed from late forecasts for considerable rain over dry areas in Argentina next week. As in the corn pit, soy traders seemingly hesitated to buy aggressively prior to the looming Export Sales and WASDE reports from the USDA. May soybeans ended Wednesday having slipped 0.5 cent to $14.66/bushel, while May soyoil edged 0.13 cents higher to 50.26 cents/pound, and May meal lost $0.6 to $435.3/ton.

Forecasts of substantial weekend rains over the Southern Plains seemingly undercut wheat futures today. The ongoing series of storms crossing the country has greatly improved the moisture situation, and by extension, crop production potential. As with corn and soybeans, traders are probably in the process of balancing positions ahead of the Export Sales and WASDE reports. May CBOT wheat futures had fallen 23.25 cents to $6.8375/bushel by late Wednesday afternoon, while May KCBT wheat dropped 19.0 cents to $7.245, and May MGE futures skidded 10.25 cents to $7.835.

Cattle futures remained weak despite recent wholesale strength. The fact that choice cutout values had jumped over 10 cents/pound over the previous 10 days seemingly did little to encourage traders. They may have been reacting to late-morning news that a few Panhandle cattle had traded at 128 cents/pound, steady with last week. That almost surely disappointed bulls expecting a follow-through cash advance. April cattle tumbled 0.82 cents to 128.80 cents/pound at their Wednesday settlement, while August dipped 0.35 cents to 124.80. Meanwhile, April feeder cattle dove 1.05 cents to 142.25 cents/pound, while August plunged 1.55 cents to 151.45.

Hog futures generally rebounded from multi-month lows Wednesday. Early weakness almost surely marked a reaction to widespread wholesale losses Tuesday, whereas the bounce probably reflected the recent firming of country cash markets. Given the large losses suffered since late January, CME prices could rise rather substantially during the days ahead, particularly if the cash and/or wholesale markets lead the way higher. April hogs settled unchanged at 79.25 cents/pound Wednesday afternoon, while June rallied 0.27 cents at 89.82.

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