Ideas that persistently tight supplies reportedly did a great deal to support corn prices in Wednesday night trading, while other buyers were reportedly encouraged by the technical advance posted this week. We must admit to be most impressed by the gains in the face of negative news. For example, a South Korean firm rejected all offers and made no purchases in a tender for 55,000 tonnes of corn in early morning activity, thereby indicating many in the industry still view the yellow grain market as being overvalued. We expect continued choppiness in the grain and soy complexes prior to the Friday release of the various USDA reports. March corn rose 3 1/4 cents to $6.97 1/2 in overnight trading, while December edged 1/4 cent higher to $5.82/bushel.
The same forces supporting the grain markets were probably exerting some bullish influence in the soybean pit as well, but legume traders seemed somewhat less sanguine than did their corn and wheat counterparts. That may simply have reflected expectations of the coming South American crop, but bears may also have been responding to talk that China will prove much less active in pursuing bean imports after having been quite aggressive during December. The inability of the nearby March contract to overcome chart resistance associated with its 10-day moving average may also be encouraging speculative sales. March beans were trading unchanged at $13.85 1/2 in pre-dawn trading, while March soyoil continued its recent advance by rising 0.20 cents to 49.84 cents/pound and March meal dipped $1.2 to $408.4/ton.
Some wire service reports suggested overnight wheat gains had been powered by the Wednesday afternoon news that larger portions of the Winter Wheat Belt had officially been declared disaster areas by the USDA. We harbor real doubts on that score, since it didn’t change the well-known fact of persistent drought over that region. Indeed, the area is getting much-needed moisture this week. We are more inclined to credit talk of an impending Egyptian wheat tender, as well as ideas that the U.S. will capture the bulk of that business. March CBOT wheat had surged 7 cents to $7.42 1/2 per bushel in Thursday morning trading, while March KCBT wheat climbed 6 1/2 cents to $8.07 3/4 and March MGE futures bounded 5 cents higher to $8.45 1/2.
After posting a surprisingly large decline Wednesday, live cattle futures proved rather mixed in Thursday morning trading. Traders are probably rather pessimistic about the results of cash trading later today and/or Friday, since flat country price action earlier in the week was followed by the Wednesday breakdown in Chicago. Mixed wholesale results are not helping the bullish cause either. February cattle futures inched one tick higher to 131.57 cents/pound in overnight activity, while April fell another 0.35 cents to 135.00.
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