Ag markets diverged Thursday afternoon

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Weather concerns apparently boosted corn futures late Thursday. The yellow grain market proved surprisingly weak in the morning hours despite surging equity values and a declining dollar. The supportive results on the weekly USDA Export Sales report also sparked little buying. That didn’t change after the monthly WASDE report, since the indicated numbers were rather mixed. Ultimately, concerns about the impact of summer weather on the current crop seemed to boost prices. September corn futures rose 7.0 cents to $5.6075/bushel at the Thursday close, while December added 5.5 cents to $5.27.

Soybean futures apparently followed corn prices upward Thursday afternoon. The soy complex responded bearishly after the WASDE report, because the July projection for new crop ending stocks rose 30 million bushels and topped industry forecasts. The concurrent rise in the soyoil carryout seemingly depressed that market. However, renewed weather concerns apparently pushed soybean futures upward in concert with the corn market later in the day. The August soybean future gained 7.25 cents to $14.72/bushel as trading wound down Thursday, while August soyoil dipped 0.49 cents to 46.53 cents/pound, and August soybean meal jumped $6.8 to $458.0/ton. November soybeans rose 4.5 cents to $12.9075 /bushel.

Wheat futures posted a surprisingly mixed close Thursday. The weekly Export Sales report proved supportive of the golden grain outlook, since the stated result for 2013-14 U.S. wheat sales easily topped forecasts. Talk that the winter wheat harvest is nearing completion also encouraged traders. The WASDE report also encouraged bulls, since the USDA cut the 2013/14 carryout despite boosting its estimate of domestic production. The weak closes at the KCBT and MGE may undercut confidence. September CBOT wheat climbed 4.0 cents to $6.83/bushel by late Thursday afternoon, while September KCBT wheat edged 0.5 lower to $7.085 and September MGE futures dipped 1.5 cents to $7.6775.

Cattle futures stabilized on support from the financial markets. U.S. cattle and beef production will probably be declining in a predictable seasonal manner during the coming weeks, so any big shifts in forthcoming demand could affect prices. Both the equity market strength and U.S. dollar weakness seen Thursday seem very supportive in that regard. Thus, cattle futures were trading around unchanged levels despite current wholesale weakness. August cattle settled 0.15 cents lower at 121.92 cents/pound Thursday, while December was unchanged at 128.45. August feeder futures sank 0.42 cents to 150.12 cents/pound as corn rebounded, with November losing 0.62 cents to 155.37.

Hog futures were weak Thursday. After pushing futures strongly higher Wednesday, the big wholesale price drop indicated on the late-afternoon pork reports undercut prices today. Discounts built into Chicago prices probably limited losses, as did support around their respective 40-day moving averages. However, bullish inability to sustain gains may bode ill for the short run. August hog futures declined 0.42 cents to 95.27 cents/pound at the Thursday afternoon close, while December tumbled 0.60 cents to 81.45.



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