CBOT Wheat futures are leading the markets higher today on better than expected export sales. Corn futures have garnered support from the wheat rally and are now trading near the day’s highs. While the July Soybean contract is very strong on cash demand for soybeans and meal, the new-crop futures are trading lower and close to the day’s lows.

Live Cattle futures are trading narrowly mixed on conflicting market signals.  While CHOICE beef sets new record highs, the fed cattle market appears steady to weaker.  Market reports have indicated feedlots are willing to sell fed cattle lower because the cash basis has strengthened since the cattle were hedged.

Lean Hog futures are down slightly in reaction to the negative cold storage report after the close yesterday. Frozen pork supplies are much larger than last month and last year.  (see more info below).

Financial markets have recovered from the early pressure originating from sharply lower Asian and European markets following news of a Chinese slowdown and follow-through weakness on fears the U.S. Federal Reserve might be closer to scaling back its QE bond-buying program.

Equity market risk as measured by the VIX is rising as market price volatility increases.

Corn Jly +5 663; Sep unch 560; Dec +1 531 (525-533) Bean Jly +16 1510; Sep -3 1297; Nov -3 1236 (1233-1249) Meal Jly +3 444; Dec -1 349 Oil -13 4951 Wheat Jly +13 701 (hi 705); Dec +11 721 KC +10 753; MGE +9 816 Oats +3 369 Rice +12 1546

LC Jun +12 12012; Oct -15 12237; Dec -12 12420 FC Aug -15 14417; Oct -45 14817; Jan -70 14940 LH Jun -57 9297; Aug -32 9175; Oct -22 8230 Milk May +3 1853; Jun +18 1828

US$ -.5% Dow steady SP -.3% NAS -.2% Tran -.4% VIX +1.2% 13.98

WTI -1.1% Brent -1% Gas -.7% NG +.8% HO -1.2% Eth -.6%

Gold +.8% Slvr -.9%

5-yr -.01 0.89% 10yr +.01 2.05% 30yr unch 3.22%

ETHANOL STOCKS DECLINE    U.S. ethanol stockpiles fell to a 2-1/2-year low. Energy Information Administration released data showing U.S. ethanol stocks were drawn down 1.5% last week to 16.2 million bbl, the lowest level since early November 2010, despite an increase in weekly production. Implied demand rose 14,000 or 1.7% to 860,000 bpd last week, an increase of 2.3% from 841,000 bpd reported a year earlier.

COLD STORAGE REPORT    Total red meat supplies in freezers were up 5 percent from the previous month and up 3 percent from last year. Total pounds of beef in freezers were down slightly from the previous month and down 2 percent from last year. Frozen pork supplies were up 8 percent from the previous month and up 6 percent from last year. Stocks of pork bellies were up 10 percent from last month but down 25 percent from last year. Total frozen poultry supplies on April 30, 2013 were up 11 percent from the previous month and up 8 percent from a year ago.

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