Corn futures drop on rain forecast, bearish WASDE report

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Corn futures settled 10 to 14 cents lower on Tuesday. Prices were weighed down by USDA’s Supply/Demand report, which was bearish for corn as ending stocks were higher than expected. Old crop stocks were expected to be down 30 million bushels, but were reported at 851 million bushels, unchanged from the May estimate. There were no revisions for new crop estimates. Exports for old crop corn were reported down 50 million bushels from last month’s estimate of 1.650 billion bushels. Weather also affected today’s trade. Forecasts for more rain across the U.S. Corn belt further depressed corn futures.

Soybean futures settled mixed on Tuesday. Prices initially spiked after the release of USDA supply/demand estimates but declined later in the day on forecasts for rain across the U.S. Midwest. USDA projected lower than expected ending stocks for both old and new crop soybeans. Old crop stocks were lowered to 175 million bushels, down from 35 million bushels from May and below average estimates of 189 million bushels. New crop ending stocks were down 5 million bushels at 140 million bushels compared to the trade estimate of 143 million.

Wheat futures closed 10 to 13 cents lower on Tuesday. Wheat futures tumbled on USDA estimates. Prices were pressured after USDA reported winter wheat production at 1.684 billion bushels, above the 1.639 billion bushel trade average but 10 million below the May estimate. Wheat ending stocks for 2011/12 were pegged at 728 million bushels, down from the 768 million in May. Worth noting is that USDA lowered the average yield level from 45.7 bu per acre to 45.4 bu per acre. Ending stocks for the 2012/13 were also lowered to 694 million bushels down 41 million bushels from the previous month’s estimate.

Cattle Futures closed lower on Tuesday. Cattle futures saw much volatility during today’s trade. Gains from steady beef demand were limited by spillover pressure from hog losses. The lack of cash trade so far this week and mixed boxed beef prices caused prices to decline from morning levels. Both choice and select cutouts were down at midday. Trade in the cash market is undeveloped but is expected to pick up later in the week.

Lean hog futures closed 50 to 90 cents lower on Tuesday. The market closed lower despite strength in the cash market. Higher pork prices also helped to limit losses but were not high enough to lift hog futures. Weak packer margins continued to weigh on the market. The bearish supply/demand report for corn weighed on prices as well.



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