Weekly Export Sales report boosts crop markets

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Corn futures remained strong Wednesday morning, thereby seeming to reflect growing optimism about short-term export prospects. The weekly USDA Export Sales report apparently confirmed bullish expectations, with the actual sales figure, at 512,600 tonnes topping forecasts ranging between 350,000 and 450,000. It will be interesting to see if bulls can sustain the move into the weekend, since considerable optimism about demand prospects had already been built into the market. March corn surged 6.25 cents to $7.1575/bushel late Thursday morning, while December rose just 2.5 cents to $5.5625.

Soybean futures also responded well to the weekly Export Sales report. Traders were reportedly anticipating a result in the 750,000 to 1,000,000-tonne range, but the USDA stated the net for last week at 1,171,000 tonnes. Growing talk that Brazilian infrastructure problems are proving even worse than previously expected may also be boosting U.S. prices. March beans had jumped 26.25 cents to $14.8375 as lunchtime approached Thursday. Meanwhile, soybean oil apparently remained vulnerable to spillover weakness from declining Asian palm oil prices; March soyoil dipped 0.10 cents to 49.17 cents/pound, but March meal climbed $10.4 to $439.7/ton.

Wheat futures rallied on strong export news as well. The USDA stated the net sales total for last week at 524,800 tonnes, while traders were looking for something between 400,000 and 600,000 tonnes. And while that result fell within the forecast range, the fact that about 75% of the total was old crop wheat seemed particularly noteworthy. That is, importers apparently want the wheat sooner rather than later. March CBOT wheat futures had leapt 7.25 cents to $7.115/bushel by late Wednesday morning, while March KCBT wheat spiked 13.25 cents to $7.475, and March MGE futures soared 14.75 cents to $8.02.

Cattle futures were mixed to higher Thursday, with the nearby February future dropping rather significantly just before its noon expiration. The spring and summer contracts were probably responding to ideas that cash prices will rise later today or tomorrow. Recent wholesale gains are apparently reinforcing such ideas. In contrast, fall and winter futures may be anticipating normal mid-2013 weather, larger crops, lower feed costs and increased cattle on feed supplies down the road. April cattle edged upward 0.32 cents to 130.20 cents/pound in late-morning activity, while August gained 0.30 cents to 125.85. Meanwhile, March feeder cattle ascended 0.75 cents to 142.20 cents/pound, while August rallied 0.50 cents at 155.07.

Talk that the cash hog markets may be firming seemingly supported hog futures Thursday morning. Country prices have clearly dropped sharply since late January and might easily continue declining on a seasonal basis. On the other hand, the price reductions and modest increases in wholesale values have pushed pork packing margins solidly into the black. Improved packer demand would certainly be a key ingredient in a late-winter rebound. April hogs were unchanged at 81.00 cents/pound late Thursday morning, while June had risen 0.25 cents to 91.47.


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