The autumn slowdown in U.S. corn exports and spillover losses from the soybean market depressed corn futures moderately Wednesday morning. The losses accelerated soon thereafter, when a Memphis-based consulting company released their updated forecasts for U.S. crop plantings for the 2012-13 crop year. They boosted their estimate of next year’s corn plantings to 99 million acres, thereby implying a huge domestic crop if normal weather conditions hold next year. The resulting drop sparked a nearby futures test of chart support just above the psychologically important $7.00/bushel level. Strong buying seemingly emerged in that area, but the course of recent events makes us wonder if the spring contracts will eventually fill the chart gap created as prices leapt higher around Independence Day. March corn ended the day 13 cents to $7.07/bushel, whereas the December 2013 contract fell just 5 1/2 cents to $6.17 1/2.

Having China cancel previously contracted purchases of 300,000 tonnes of soybeans Tuesday morning obviously did a number on CBOT soybean prices later in the day. And after showing signs of firmness in overnight activity, the decline resumed Wednesday morning. The downward momentum was apparently quite substantial, since news that a Memphis-based consulting company had lowered its forecast of 2013 U.S. soybean acreage by about 1.1 million acres did little to support the market. CBOT traders seemingly concentrated on the fact that the private forecast would still set a record for domestic soy plantings. January beans essentially duplicated the preceding drop by diving 28 cents to $14.38/bushel, while January soyoil fell 0.67 to 48.50 cents/pound and January meal slumped an additional $8.4 to $437.2/ton.

Tuesday night talk that Egypt would enter the international wheat markets as a major buyer was borne out by midmorning. The fact that they bought 180,000 tonnes of U.S. soft red winter wheat, as well as news of a large private sale to the big African nation, sent American wheat futures sharply higher. However, bulls proved unable to sustain the move. In general, futures markets unable to build upon such positive news are often seen as being vulnerable to a larger reversal. That may be one reason futures continued sliding despite news that a Memphis-based consulting company reduced its estimate of recent winter wheat plantings by approximately 300,000 acres. Traders may also have been anticipating a larger downward revision. One has to wonder if the wheat market is now vulnerable to a resumption of the drop suffered last week. March CBOT wheat settled 5 1/2 cents lower at $8.05 3/4 per bushel, while March KCBT fell 3 cents to $8.58 and March MGE futures dropped 7 cents to $8.95 1/2 per bushel.

After proving surprisingly weak Tuesday, possibly due to the sizeable drop posted by choice beef values, nearby live cattle futures underwent a fresh resurgence Wednesday morning. That buying probably marked the industry response to wire service surveys published ahead of the Friday afternoon (12/21) USDA Cattle on Feed report, which is expected to state November feedlot placements approximately 9% below the comparable 2011 rate. Forecasts for the December 1 U.S. feedlot population, at just 93.4% of last year, also imply a 10-year low for that figure. These forecasts reemphasize the growing tightness of the domestic fed cattle supply. Conversely, having choice beef prices continually prove unable to mount a serious challenge of the $2.00/pound level raises persistent questions about the strength of beef demand at current levels. Still, recent events certainly seem to favor bullish interests. February live cattle futures jumped 1.30 cents to 134.25 cents/pound and April added 0.85 cents to 137.97.

News of cash hog strength and spillover support from the cattle market seemed to boost CME swine values Wednesday. One also has to wonder if news that Canadian packers will honor Russia’s request to monitor their product for the growth promotant ractopamine supported prices as well. That might be seen as a negative for the U.S. market, since domestic sources have not agreed to Russia’s terms, but reduced ractopamine use would probably reduce North American pork production. Bulls may also be thinking the snowstorm looming over Iowa and surrounding areas will disrupt transportation and at least partially support prices over the short run. February hogs surged 1.30 cents to 86.55 cents/pound this morning, while those anticipating the usual summer peak pushed June futures 0.60 cents higher to 100.60.