Corn futures gapped sharply higher Thursday morning, surging to the highest level in 10 years. Private production forecasts coming into the market this week are down 100 million to nearly 200 million bushels from USDA's 10.9 billion bushel October forecast. December futures are 14 cents higher at $3.47 1/2 and the March 07 contract is also 14 cents higher at $3.61.



Soybean futures are also up sharply on spillover support from the surging corn market. Despite expectations for an upward revision in the size of the soybean crop next week, soybean futures are also setting new contract highs in an attempt to avoid a huge acreage cut. The November futures contract is up 13 1/2 cents $6.58 1/2 and January is up 12 3/4 cents at $6.71.



Wheat futures are also strongly higher. Weekly wheat export sales climbed to 34.5 million bushels, the highest level of the crop year reflecting last week's sale of 400,000 metric tons of hard red winter wheat to Iraq. The Chicago December contract is up 10 cents to $4.97 1/2 while Kansas City December is up 11 cents at $5.30. Minneapolis December is 10 1/2 cents higher at $5.10.



Cattle futures are mixed at mid morning Thursday after a sharply lower opening. Rising corn prices dropped feeder cattle futures as much as the 300 point limit in early trading. Cash cattle have traded lightly at $89 to $89.50, down a dollar from last week. December cattle futures are up 15 points to $87.70 while February futures are 7 points lower at $90.60.



Lean hog futures have rebounded from early weakness to turn higher at mid session. The lower opening triggered sell stops below recent lows but firm cash fundamentals provided support. Cash markets are steady to higher despite a 52 cent decline in the pork cutout value Wednesday afternoon. December lean hog futures are 10 points higher at $64.50 and the February contract is up 2 points at $67.30.