Traders are awaiting the USDA Export Sales reports

After falling rather sharply Thursday, corn futures followed soybeans higher Friday morning. Short-term prospects seem balanced between the bullish impact of persistent Argentine dryness and poor export demand for U.S. corn. However, prices have generally reflected soybean market fluctuations lately, so it was not terribly surprising to see corn follow the China-driven soybean move higher early this morning. Things may change when the USDA releases its weekly Export Sales report later this morning. March corn rose 1.25 cents to $6.92/bushel Thursday night, while December was unchanged at $5.54.

The soybean market continued its mid-February surge early Friday morning. Forecasts for persistent dryness over drought-stressed soybean fields in Argentina are probably offering ongoing support for prices, but the latest upward surge was apparently powered by news from China. That is, talk of strong demand, especially for soybean meal sent the Chinese market sharply higher overnight, which rather clearly sparked an echo at the CBOT. Traders will be looking forward to the weekly Export Sales report from the USDA as well. March beans surged 16.0 cents to $15.0375 early Friday morning, while March soyoil gained 0.07 cents to 51.38 cents/pound, and March meal jumped $6.0 to $443.3/ton.

Wheat futures rebounded from their Thursday drop to 8-month lows overnight. Traders may now view the breakdown as being overdone, but they are probably reacting to the bullish leadership from the soybean pit as well. Bulls are also hoping for a good result on the weekly Export Sales report from the USDA later this morning. March CBOT wheat futures advanced 2.0 cents to $7.2325/bushel in early Friday morning action, while March KCBT wheat pushed up 3.0 cents to $7.6025, and March MGE futures rose 2.0 cents to $8.085.

Cattle futures were mixed to lower Friday morning. The situation does not seem very supportive at this juncture, as exemplified by the fact that the most-active April contract posted its lowest close since last June Thursday afternoon. The fact that it remains about five cents premium to cash values does not bode well for its short-term performance if the cash and/or wholesale markets do not rally seasonally during the next 6-8 weeks. CME action today may be dominated by position squaring, since the monthly USDA Cattle on Feed report will be released this afternoon. April cattle inched one tick higher to 127.82 cents/pound early Friday morning, while August slipped by the same amount, to 125.12. Meanwhile, March feeder cattle slid 0.07 cents to 140.62 cents/pound, and August fell 0.20 cents to 153.47.

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