Corn closes lower on Wednesday

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Corn futures ended lower. Additional export sales were announced this morning totaling nearly 27 million bushel including 10.3 million bushels designated to China and 16.5 million to unknown which is widely suspected to be China. Export sales announcements so far this week total over 50 million bushels split between the current marketing year and 2012/13. However, despite the export sales news and higher soybean prices, corn futures were lower as funds were aggressive sellers. May corn settled 7 ¼ cents lower at $6.11. The December contract was 3 ½ cents lower at $5.38.

Soybean futures settled higher on Wednesday. Worries about South American production and rumors of more Chinese buying continued to rally prices. The May soybean futures broke above its past trading high from last summer in overnight trading. Traders saw that as a bullish technical signal and it ignited strong buying in the overnight session which carried over to the start of the day session. But those early large gains eroded under profit taking and spillover weakness from losses in the corn market. May futures closed 12 1/4 cents higher at $14.73 1/2 while November gained 18 1/2 cents at $13.70 1/2.

Wheat futures closed mostly lower to mixed on Wednesday, with CBOT hit hardest. The frost threat to soft red winter wheat for this weekend and into early next week dissipated to little or no threat overnight, pressuring CBOT from the outset of trading. Then the reversal in corn futures to the downside, plus soybeans giving back part of early strong gains spilled over into wheat as well. From a global perspective, the weather outlook is positive for 2012 production and just yesterday STATS Canada released planting intentions nearly a million acres higher than trade expectations. CBOT May closed 8 cents lower at $6.16 ½; KCBT May closed just a penny lower at $6.32 and MGE May close 1 ¾ cents lower at $7.82 ¾.

 

Cattle futures closed higher. Cattle futures rebounded modestly after steep losses on Tuesday tied to the BSE scare. USDA confirmed that a California dairy cow tested positive for BSE. Concern that beef exports could suffer was alleviated to some extent as most key beef importing countries indicated that they are not planning to restrict beef imports from the U.S. Domestic demand has already been under some pressure, though, from the LFTB controversy and high retail prices. The BSE news adds to the negative sentiment. June cattle futures settled 70 cents higher at $112.27. August was 40 cents higher at $116.00.

Lean hog futures closed higher on Wednesday. Hog futures bounced back from the steep decline late in the day on Tuesday that was triggered by the reports of the new case of BSE. Hog traders stepped back into the market once they had a chance to consider the implications of the new information. While hog prices rebounded from the low closes on Tuesday, prices are still lower than they were on Monday. Cash hog prices and the cutout value edged up just a little bit on Tuesday. The May contract ended the day at $87.13, up 53 cents. June was $1.03 higher, settling at $87.58.



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