Corn futures traded sharply higher on Tuesday. Concern about hot and dry weather and supportive Supply/Demand revisions by the USDA helped support futures. Most hot and dry weather is expected in the Corn Belt through early next week. As expected, USDA raised the corn production estimate by 270 million bushels from last month and 1 billion bushels higher than 2010. However, USDA was fairly aggressive with usage projections, increasing total use by 245 million bushels from last month to 13.5 billion. Feed and residual use, corn for ethanol and exports all increased from last month. Ending stocks are now forecast at 880 million bushels, 175 million higher than the June projection, but 140 million below trade expectations. September closed 21 cents higher at $6.64 and December was 25 1/4 cents higher at $6.70 3/4.
Soybean futures closed higher on Tuesday. Spillover strength from corn and crude oil helped push soybean futures higher. There are some weather concern as mostly hot and dry weather is expected over the Midwest through early next week. USDA's Supply/Demand report was neutral for soybeans. As expected, the production estimate was lowered by 60 million bushels to 3.225 billion. On the demand side, USDA reduced the export forecast by 25 million bushels to 1.495 billion. Although use projections were lowered, it was not enough to offset the production setback and the ending stocks forecast for 2011/12 declines by 15 million bushels to 175 million. August closed 9 cents higher at $13.55 1/2 and November was 11 1/4 cents higher at $13.58 1/4.
Wheat futures traded mostly higher on Tuesday. The CBOT and KCBT posted strong gains while the MGE was mixed. Revisions in the USDA's supply/demand outlook were mixed in terms of price impact. USDA raised estimated 2011 production by 48 million bu. over June, compared to trade estimates of a 13 million bushel hike. However, USDA unexpectedly raised estimated U.S. exports by 100 million bu., which resulted in a net 17 million bu. decline in projected ending stocks compared to pre-report trade estimates averaging 15 million bu. higher than last month. CBOT September was 32 3/4 cents higher at $6.72, KCBT September was 21 3/4 cents higher at $7.33 while MGE September ended 1 1/4 cents lower at $7.93.
Cattle futures closed mostly lower on Tuesday. The market was pressured by ideas that demand will slow seasonally and could also be hurt by domestic and global economic problems. Further losses were limited by recent strength in the cash market and bullish revisions in the Supply/Demand. USDA lowered their beef production estimate for 2011 and raised its export forecast. August ended 68 cents lower at $114.03 and October was 70 cents lower at $119.95.
Lean hog futures were solidly lower in front end contracts on Tuesday. Weakness in the cash market and and profit-taking from the strong gains on Monday weighed on futures. Rumors of China buying more U.S. pork have so far gone unconfirmed. USDA raised its 2011 pork production estimate this morning, but left exports unchanged. August closed $1.25 lower at $97.93 and October was 55 cents lower at $92.20.