Monday news that private exporters sold 102,200 tonnes of corn for 2013 delivery over the weekend probably played a sizeable role in the moderate gains posted by the yellow grain market yesterday. That information was followed overnight that South Korea had bought 315,000 tonnes of corn since Friday, with a portion of those purchases coming from Cargill. The fact that the bulk of the sale was sourced overseas probably accounts for the muted reaction in CBOT corn futures this morning, since it suggests U.S. product is still too expensive for international buyers. March corn inched 1/4 cent higher to $6.85 3/4 overnight, while December fell 2 cents to $5.72 1/2 per bushel.
Ideas that recent losses were significantly overdone apparently sparked the Monday rebound in CBOT soybean futures. Technicians may also have been impressed with the early bounce from just above the $13.50 level (basis March), due in part to the fact that the market had seemingly pivoted around that point last spring. However, in the absence of supportive fundamental news Monday afternoon and evening, the bean market slipped in overnight trading. Industry observers particularly cited the prospect of near record crops in South America during the coming weeks and months. March beans had slipped 1 cent to $13.87 1/2 per bushel in early morning action, with March soyoil rising 0.08 cents to 50.04 cents/pound and March meal dipping $0.2 to $408.7/ton.
The weekly Export Inspections report proved more favorable for wheat than for corn or soybeans, since the result topped pre-report forecasts. Moreover, the news probably reinforced ideas that recent price declines will provoke strong international demand for relatively cheap U.S. wheat. Technicians are reportedly expecting continued short-term gains as well, especially after momentum indicators reached deeply oversold levels last week. However, those in the industry must keep the Friday USDA reports in mind, since those will not only include the usual supply/demand and the 2012 spring wheat production estimate, it will also represent the first definitive estimate of winter wheat plantings, so the result could cause a sharp reaction in 2013 futures. March CBOT wheat climbed 3 1/2 cents to $7.54 3/4 per bushel in Tuesday morning electronic trading, while March KCBT wheat gained 4 1/2 cents to $8.12 and March MGE futures advanced 3 1/4 cents to $8.49 3/4.
Despite likely industry disappointment with cash cattle trading last Friday, nearby futures rose slightly Monday morning. That probably reflected industry hopes for seasonal strength since traders are likely anticipating a combination of seasonal supply reductions and improved retail industry buying for planned early-February beef features. However, midday reports that wholesale prices had declined rather significantly seemingly undercut the market. The fact that Southern Plains producers sold limited numbers of cattle last week may also have proven discouraging, since it implies the remaining animals will increase market-ready supplies this week. Futures gave back their modest Monday gains in overnight activity. We suspect forthcoming wholesale price shifts will play a big role in pricing cattle futures over the short run. February cattle fell 0.12 cents to 132.87 cents/pound overnight,while April dipped 0.20 cents to 136.50.