Ag markets turned mixed ahead of the USDA reports

The financial markets seemed to boost crop markets Thursday morning. Old crop tightness and weather concerns are supporting ag prices at this juncture. In addition, Wednesday statements from Fed Chairman Bernanke sparked strong equity index gains and large U.S. dollar losses overnight, which in turn encouraged commodity buying. However, bulls seemed to head for the exits just before the weekly USDA export sales were to be released. September corn futures advanced 1.0 cent to $5.5475/bushel early Thursday morning, while December dipped 0.5 cent to $5.21.

The soy complex was mixed in early Thursday action. Soybean futures continued their recent advance driven by old crop tightness and new crop weather fears. The sharp financial market reaction to comments from Fed Chairman Bernanke also seemed very supportive. However, prices flattened as the industry began looking forward to the morning release of the weekly USDA Export Sales and monthly WASDE reports. August soybean futures moved 1.5 cents higher to $14.6625/bushel just after sunrise Thursday, while August soymeal ascended $1.4 to $451.1/ton, and August soybean oil lifted 0.19 cents to 47.21 cents/pound.

The same conditions boosting corn and soybeans supported wheat futures as well. General grain/soy tightness at this juncture and weather concerns were probably encouraging bulls in the wheat pit as well; that phenomenon was exemplified by the gain posted by expiring July CBOT futures. The large equity overnight advance in equity index futures and the concurrent U.S. dollar decline very likely sparked buying as well. September CBOT wheat climbed 5.0 cents to $6.84/bushel in early Thursday trading, while September KCBT wheat gained 3.25 cent to $7.1225 and September MGE futures surged 5.25 cents to $7.6875.

Cattle futures are mixed in early Thursday trading. The nearby contracts rose slightly overnight despite another decline in choice beef cutout Wednesday afternoon. That may simply reflect the favorable financial market developments reaction to Bernanke comments, but the gains may also anticipate forthcoming cash firmness as seasonal factors begin pointing upward. August cattle declined inched up 0.12 cents to 122.20 cents/pound as the sun rose over Chicago Thursday, while December added 0.05 cents to 128.50. August feeder futures lifted 0.32 cents to 150.87 cents/pound, and November sank 0.10 cents to 155.90.

Hog futures are mostly weaker this morning. CME traders were apparently expecting a strong early-summer environment as they pushed futures higher Wednesday. Indeed, they may be correct, but the late-afternoon release of the daily wholesale reports almost surely caused bulls to have second thoughts, since those stated pork cutout sharply lower. Thus, hog futures slipped overnight and seem likely to remain under pressure today. August hog futures gained 0.02 cents to 95.72 cents/pound in early Thursday electronic trading, while December skidded 0.15 cents to 81.90.

ICE cotton prices continued their advance Wednesday night. The white fiber market is probably benefiting from bullishness spilling over from the other crop markets, but the comments from the Fed Chairman and the strong financial market reaction are almost surely encouraging cotton buying as well. Still, early market action may be stifled by the looming release of weekly and monthly reports from the USDA. October cotton rallied 0.29 cents to 87.59 cents/pound in early morning Thursday trading, while December edged up 0.03 cents to 86.82.


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