Ag markets moved mostly lower on Tuesday

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Corn futures ended lower after a choppy trading session following USDA’s monthly supply/demand update. The market’s reaction to the report turned negative even though the revisions for corn were generally positive for the price outlook. USDA raised exports and corn for ethanol use by 50 million bushel each and cut ending stocks by 95 million bushels from last month to 1.792 billion, well below trade estimates for only 15-25 million bushel cut. Lower wheat and soybean prices seemed to spill over into corn. March futures were 2 cents lower at $4.36/bushel while May was 2 cents lower to $4.445.

The WASDE report held very few surprises for soybean traders. The 2013/14 soybean US domestic ending stocks at 150 million bushels were very close to the average industry forecasts, although they were 20 million bushels reduced from November estimate. Pressure seemingly came from more from the global ending stocks, which were increased by 10 mmt from a year ago with increase of about 4 mmt each in Brazil and Argentina. January soybeans skidded 5.5 cents to $13.3825/bushel in Tuesday trading, while January soyoil dipped 0.11 cents to 40.11cents/pound, and January soymeal declined $0.4 to $438.3/ton.

Wheat turned decisively lower on Tuesday. USDA WASDE reported that 2013/14 December wheat ending stocks 575 million bushels. That compares to the November wheat ending stocks at 565 million bushels. In addition, rising global wheat supplies further added downward pressure on the wheat prices. March CBOT wheat futures fell 11.75 cent to $6.3875/bushel, while March KCBT wheat futures descended11.75 cent to $6.8425, and March MWE futures slipped 8.75 to $6.68.

Cattle futures were mostly lower on Tuesday on expectations of larger fed supplies available this week. Beef prices were mixed at midday, but higher steer weights suggest a slight backlog in market-ready cattle although the longer term outlook for reduced supplies over the 60-90 days remains intact. In the monthly supply and demand update, USDA boosted the beef production estimate slightly for this year and 2014, but that was partially offset by stronger exports. February cattle futures were .225 cents lower to 132.65 with April .125 cents lower at 133.85. Meanwhile, January feeder cattle were .45 cents higher at 165.55 cents/pound, and March feeders were steady at 165.475

Hogs futures ended the day lower. Heavy hog weights and larger than expected pork production have weighed on the market, although industry analysts expected that meat processors could be facing a shortage due to a swine virus. However, daily slaughter is estimated lower by 0.91% from a week ago. February hog futures dropped 1.10 cents at 88.75 cents/pound, while June moved down 0.475 to 100.10.

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