Corn futures turned lower at midday. The market’s reaction to the USDA supply and demand report turned negative even though the revisions for corn were generally positive for the price outlook. USDA raised exports and industrial 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 a 15-25 million bushel cut. However, USDA lowered the season average price forecast 10 cents per bushel to $4.40 and lower wheat prices seemed to spill over into corn. March futures were 6 cents lower at $4.32/bushel while May was 6 cents lower to $4.405.
Soybean futures posted a mixed note in Tuesday morning. On the bearish side, Asian palm oil ended lower which added downward pressure on soybean futures prices. In the meantime, Brazil increased its soy production forecast to 90.0 mmt from an average of 89.0 mmt in November, which weighed on the market. On the other hand, however, very tight domestic soybean ending stocks from USDA supported the market. January soybeans gained 0.5 cents to $13.4425/bushel in Tuesday trading, while January soyoil increased 0.09cents to 40.31cents/pound, and January soymeal advanced $4.1 to $465.7/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 tumbled 11 cent to $6.395/bushel, while March KCBT wheat futures fell 12.75 cent to $6.8325, and March MWE futures dove 8 to $6.6875.
Cattle futures are lower on ideas expectations of larger fed supplies available this week. Beef prices were higher on Monday which is supportive, but higher steer weights suggest a slight backlog in market-ready cattle although the longer term expectation for reduced supplies over the 60-90 days remains intact. In USDA’s supply and demand update, they boosted the beef production estimate slightly for this year and 2014, but that was partially offset by stronger exports. February cattle futures are .575 cents lower to 132.47 with April .40 cents lower at 133.625. Meanwhile, January feeder cattle are .275 cents higher at 165.42 cents/pound, and March feeders are .175 lower at 165.225
Hogs futures continued the downward pattern on Tuesday morning despite the cash bids were holding steady. Although the temperature dropped to a very low level, farmers believe that there are no problems moving hogs. Therefore, supplies of hogs are still sufficient. February hog futures dropped 1.175 cents at 88.675 cents/pound, while June moved down 0.5 to 100.075.