Ag markets were mixed early Thursday morning

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Corn futures set back slightly Wednesday night after having reached 6-week highs yesterday. The gains posted earlier this week also put the nearby futures above trendline resistance drawn across recent highs. No particular news concerning the yellow grain emerged early Thursday morning, so we are inclined to blame technical factors, especially the need to test the old trendline from above. May corn dipped 2.25 cents to $7.3025/bushel in overnight trading, while December edged 0.5 cent lower to $5.665.

Soybean futures rallied Wednesday and continued rising early Thursday morning, in anticipation of renewed Chinese demand for U.S. soybeans after cancelling about 2.0 million tonnes of Brazilian orders. The overnight rise was particularly impressive since it was sustained in the face of news that Chinese government officials are selling 1.3 million tonnes from state reserves to those who need the beans right away. May soybeans surged 9.25 cents to $14.29/bushel early Thursday morning, while May soyoil climbed 0.39 cents to 50.23 cents/pound, while May meal moved up $1.6 to $415.4/ton.

Wheat futures performed very well Wednesday, but declined in overnight trading. Some traders were probably surprised by the overnight setback, especially after hearing that the U.S. would source the bulk of a large Japanese import tender. We would point out that the May CBOT contract ended yesterday just under major technical resistance associated with its 40-day moving average (MA). That may force the wheat market to consolidate for a while before making another run at that level. May CBOT wheat futures fell 6.75 cents to $7.2925/bushel in pre-dawn Thursday trading, while May KCBT wheat slipped 2.5 cents to $7.625, and May MGE futures lost 4.75 cents to $8.0475.

Cattle futures staged a sizeable comeback from cash-driven Tuesday losses on Wednesday, and sustained modest gains overnight. The bounce is impressive since the short-term wholesale outlook seems less than promising. Actually, news that the U.S. Senate had reached a deal that would avoid sequester furloughs of USDA meat inspectors this summer probably supported the market last night. April cattle rose 0.25 cents to 126.30 cents/pound Wednesday night, while August gained 0.12 cents to 123.35. Meanwhile, April feeder cattle futures added 0.37 cents to 138.02 cents/pound, and August climbed 0.50 cents to 147.65.

Hog futures proved rather mixed again in early Thursday morning activity. That was surprising since both the cash and wholesale sectors suffered significant losses Wednesday afternoon. The fact that the market is somewhat oversold may elicited some buying, but we are more inclined to credit the news that anticipated meat inspector furloughs now seem likely to be avoided for the late firmness. April hogs were unchanged at 77.87 cents/pound early Thursday morning, while June skidded 0.12 cents to 88.37.

Cotton futures dove Wednesday and continued lower Thursday morning in response to news that China and India were both considering sales from large domestic reserves. Talk that China might also boost its duty on imported yarn may have depressed prices as well. Chinese officials argued overnight that their domestic sales would not undercut the global market, but apparently persuaded few in the industry. May cotton slid 0.34 cents to 88.76 cents/pound in early Thursday morning action, while December declined 0.26 cents to 87.72.



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