Ag markets turned decidedly mixed by midday Thursday

Strong yields are weighing on the corn market. Despite a supportive global production report from the International Grains Council, corn prices slipped this morning. Talk that early yields from the accelerating Corn Belt harvest are topping expectations is apparently weighing upon the market. December corn sank 2.75 cents to $4.52/bushel just before lunchtime Thursday, and May dipped 3.0 cents to $4.725.

The soy complex was also suffering from Thursday morning pressure. Chinese officials reportedly sold a substantial amount of soybeans from state reserves early Thursday morning, which suggests diminished short-term import demand. And while Asian palm oil weakness remained a negative factor, traders were also talking about surprisingly good U.S. bean yields on anecdotal reports. November soybeans fell 5.75 cents to $13.16/bushel around midsession Thursday, while October soyoil slipped 0.07 cents to 41.75 cents/pound, and October soymeal sagged $2.6 to $416.0/ton.

The wheat markets bucked the corn and soy downtrends Thursday. Although today's IGC report seemed bearish for wheat, and the weekly Export Sales report was a non-event, wheat futures rose moderately again Thursday morning. Traders still seem to be reacting to discussions of strong Chinese buying and Argentine crop problems. The fact that the winter wheat contracts broke out above major technical resistance Wednesday probably sparked follow-through buying. December CBOT wheat climbed 5.5 cents to $6.76/bushel in late Thursday morning action, while December KCBT wheat gained 5.75 cent to $7.24, and December MGE futures added 4.5 cents to $7.2275.

Cattle futures suffered moderate losses Thursday morning. After rising almost four cents from their September 17 lows, the nearby cattle contracts were probably due for a setback. Indeed, wire service sources cited profit-taking for today's early losses. Traders may also harbor doubts about the outcome of this week's cash trading in light of late wholesale slippage. October cattle futures slid 0.40 cents to 127.15 cents/pound in late morning action, while December sagged 0.27 cents to 131.00. Meanwhile, October feeder cattle surged 0.82 cents to 163.75 cents/pound, and January lifted 0.25 cents to 163.30.

Talk of cash weakness may have undercut hogs futures this morning. The recent hog rally substantially reduced the nearby contracts' discounts to cash values. That may have rendered them vulnerable to talk of sliding country quotes, especially since those country quotes have a strong history of dropping during October. October hog futures plunged 1.17 cents to 92.52 cents/pound by late Thursday morning, while December dove 0.85 cents to 87.75.


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