Grain markets trade higher at midday

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Corn futures are higher at midday. After posting a new 3 month low close on Wednesday, futures are rebounding higher on tight cash markets and renewed talk of possible Chinese buying interest. Japanese traders also indicate they are halting further imports of European corn due to poor quality. Since Japan is traditionally a large U.S. corn buyer, the move could translate into stronger exports. However, this week’s export sales were disappointing at only 11.8 million bushels for the current year. May corn is 15 3/4 cents higher at $6.17 1/2 and December is 12 1/2 cents higher at $5.41 1/4.

Soybean futures are trading higher at midsession. The market is gaining ground on talk of Chinese buying of both corn and soybeans. Over the past 24 hours, China purchased another 110,000 tonnes of the 2011 U.S. crop harvest. It is very unusual for China to buy so much of the previous harvest this late in the crop year. USDA also issued its weekly export sales report. Soybean sales topped expectations and there were also large sales of soybean meal and soybean oil. The May contract is up 15 cents at $14.22 3/4 and November is up 12 cents at $13.49 3/4.

Wheat futures are trading higher at midday. Once again the grain complex is trading pretty much in sync on better news for the outside markets, only today the unified trend is up. Weekly export sales were within the range of expectations, showing that U.S. wheat remains competitive in world markets with the steady decline in values recently. But weather forecasts continue mostly favorable and seasonally, the trend is weaker into May in the absence of weather scares. CBOT May is 12 1/2 cents higher at $6.23 1/4; KCBT May is 10 1/4 cents higher at $6.36 1/4 and MGE May is 4 cents higher at $8.04.

Cattle futures are higher at midday. Cash trade this week is unfolding at mostly $122 per cwt, about steady with last week. Steady cash trade is seen as positive along with further gains in the beef market. Beef prices are up $7 to $9 from last week, suggesting beef demand is on the mend. Weekly beef export sales were also strong. USDA will release the monthly Cattle on Feed report on Friday afternoon. The report is expected to show cattle on feed up 2% from a year ago. June cattle futures are 67 cents higher at $115.50 and August is 60 cents higher at $118.75.

Lean hog futures are trading higher at midday. The increase in hog futures on Thursday is in part a short-covering rally, but there are also favorable developments in outside markets. The stock market is trading higher and corn prices are posting solid gains. But pork prices fell again on Wednesday and they are once again at the lowest level of the year. Cash hog prices were up a little on Wednesday driving processing margins further into the red. The May contract is up 70 cents at $87.95. June is 48 cents higher at $87.83.



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