Ag markets bounced from Wednesday losses this morning

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Corn futures proved unable to avoid the general commodity rout Wednesday, although the losses suffered by the yellow grain market were certainly smaller than those posted by numerous other commodities. Profit-taking probably played a big role in the corn decline. Thus, it was not terribly surprising to see futures rebound early Thursday, especially with significant portions of the western and northern areas of the Corn Belt being blessed with heavy snow today. Corn plantings are likely to be reported as dramatically behind normal next week. July corn surged 7.25 cents to $6.54/bushel early Thursday morning, while December advanced 5.0 cents to $5.555.

Soybean futures rebounded moderately from their big Wednesday decline in early Thursday trading. Concerns about forthcoming demand from China have heightened in the wake of weak economic reports posted lately, but realists have to doubt their buying will slow all that much in 2013. Indeed, the domestic situation remains extremely tight, thereby implying persistent support for old crop prices. July soybean futures bounced 3.5 cents to $13.765/bushel in overnight trading, while July soyoil gained 0.06 cents to 48.91 cents/pound and July soybean meal climbed $2.2 to $406.6/ton.

Wheat futures were also dragged lower by the broad commodity breakdown Wednesday, but quickly rebounded in response to the latest news. That is, preliminary reports from the Wheat Quality Council tour indicated the western Kansas crop will be very poor this year, as did a survey of the Oklahoma crop. Forecasts for another freeze tonight probably encouraged buying as well, especially with the northern Plains being blessed with snow, thereby implying further delays to spring wheat plantings. July CBOT wheat futures rose 3.75 cents to $7.2475/bushel in pre-dawn Thursday activity, while July KCBT wheat climbed 4.5 cents to $7.8675 and July MGE futures jumped 6.75 cents to $8.225.

Cattle futures rose Wednesday in response to the wholesale strength that has proven quite extreme so far this week. Indeed, the afternoon quote for choice cutout, at 199.49 is the highest figure since the market was backing away from its record high in October 2003. Although cash prices in the Southern Plains were flat around noon yesterday, CME traders are probably expecting higher prices today and tomorrow. Thus, the overnight rise may presage more of the same. June cattle surged 0.67 cents to 123.15 cents/pound in early Thursday morning trading, while December gained 035 cents to 128.17. August feeder cattle futures climbed 0.25 cents to 148.97 cents/pound, while October added 0.52 cents to 152.97

CME lean hog followed through modestly upon their strong Tuesday gains Wednesday and continued rising overnight. The big wholesale decline posted late Tuesday was largely reversed yesterday, while cash markets continued their late surge. The industry is obviously expecting much more of the same during the days and weeks ahead, with the question being whether that strength will exceed the gains already implied by premiums built into CME futures. June hog futures increased 0.37 cents to 93.32cents/pound in early Thursday electronic trading, while December futures edged up 0.10 cents to 78.75.

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