Ag markets generally strong Thursday morning

Corn futures built upon their overnight surge Thursday morning. Traders cited tight domestic supply conditions for a portion of the strength, as well as the prospect of continued delays to spring plantings for the CBOT gains. The weekly Export Sales report seemed generally neutral to supportive, since both the old and new crop result came in toward the upper end of forecast ranges. July corn surged 9.5 cents to $6.5625/bushel Thursday morning, while December advanced 3.25 cents to $5.5375.

The expiring May soybean contract seemingly rose in response to ongoing supply tightness, but deferred futures suffered modest losses. The potential for a big acreage shift from corn to beans is probably undermining the market. The Export Sales report actually seemed to favor the later contracts, since the stated 2012/13 net came in at -109,800 tonnes, while the 2013/14 figure jumped to 1,341,100 tonnes. July soybean futures slipped 0.25 cents to $13.7275/bushel around midsession Thursday, while July soyoil sank 0.17 cents to 48.68 cents/pound but July soybean meal climbed $1.2 to $405.6/ton.

Wheat futures moved generally higher Thursday morning. Actually, given the negative weather and crop news dominating the market lately, it was rather surprising that prices had not risen more substantially. Ultimately, recent gains may have fully incorporated the bullish views held by many in the market. The Export Sales report seemingly had little impact, possibly due to the neutral nature of the old crop result (new crop sales seemed supportive). July CBOT wheat futures rose 5.0 cents to $7.26/bushel in Thursday morning activity, while July KCBT wheat climbed 3.25 cents to $7.855 and July MGE futures jumped 6.5 cents to $8.2225.

Cattle futures continued their Wednesday surge Thursday morning. Late reports indicated considerable cash market firmness Wednesday afternoon, but spiking wholesale prices were almost surely powering the market upward once again. For example, choice cutout jumped 0.81 cents to 200.30 cents/pound, which marked its first time above the $2.00 level since October 2003. It certainly seems to be headed even higher. June cattle surged 1.42 cents to 123.90 cents/pound in Thursday morning trading, while December gained 0.75 cents to 128.57. August feeder cattle futures climbed 1.27 cents to 150.00 cents/pound, while November added 0.52 cents to 154.02

CME lean hog proved unable to follow cattle futures higher Thursday morning despite very similar fundamentals. That is, tight seasonal supplies and resurgent consumer demand will very likely push cash and wholesale prices higher over the next 6-8 weeks. However, CME futures are already trading at substantial premiums to spot values. Moreover, the midday wholesale quote posted a stunning decline. June hog futures slipped 0.45 cents to 92.50 cents/pound just before lunchtime Thursday, while December futures fell 0.45 cents to 78.20.


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