Ag markets diverged widely Wednesday afternoon

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After opening weakly, corn futures surged Wednesday. First came the daily grain report indicating private exporters had sold 540,000 tonnes of new crop corn to China and other unknown destinations. That was followed by the weekly Energy Information Administration report showing ethanol production accelerated last week. These suggest underlying corn demand remains strong despite the elevated cost. July corn jumped 18.5 cents to $6.185/bushel by the Wednesday close, while December climbed 10.25 cents to $5.305.

Although active farmer selling has reportedly eased the old crop soybean situation somewhat lately, soy futures proved quite firm again Wednesday. That probably reflected strength spilling over from the corn market, as well as reported firmness in the Asian palm oil markets Tuesday night. Traders of nearby meal futures may be expecting recent farmer sales to accelerate the crush, thereby limiting soymeal gains. July soybean futures surged 16.0 cents to $14.9425/bushel Wednesday afternoon, while July soyoil gained 0.16 cents to 49.64 cents/pound, but July soybean meal rose $1.9 to $440.6/ton.

There seemed to be little fresh news concerning wheat Wednesday, although some traders may have responded to a private forecast of 2013/14 global production below the recent USDA prediction. Otherwise, the golden grain markets almost surely benefited from concurrent corn and soy gains. Beneficial weather may have weighed upon Minneapolis prices. July CBOT wheat futures advanced 8.0 cents to $6.885/bushel at its Wednesday settlement, and July KCBT wheat added 6.7.5 to $7.4325, whereas July MGE futures declined 4.25 cents to $8.0775.

The ongoing advance in wholesale values seemed to support cattle futures early Wednesday, which probably reflected trader ideas that producers would demand higher prices for their cattle as a consequence. However, a midsession report indicating Panhandle prices had fallen undercut futures rather badly. June cattle closed 1.10 cents lower at 120.00 cents/pound Wednesday, while December dropped 0.87 to 124.32. Meanwhile, August feeder cattle futures plummeted 2.15 cents to 144.32 cents/pound; November matched that plunge and settled at 149.85.

Anticipation of seasonal strength through mid-June apparently supported CME lean hog futures again Wednesday, especially with wholesale prices continuing their seasonal advance. Traders now seem to believe the usual pre-Memorial Day slide often seen in the hog and pork complex will not occur this year, which apparently powered the late surge. June hog futures leapt 2.15 cents to 94.55 cents/pound at its Wednesday settlement, while December futures added 0.90 cents to 79.50.



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