Corn futures traded sharply lower on Wednesday. The market was pressured by the bearish Supply/Demand report released this morning, sharply lower crude oil prices and strength in the dollar index. USDA pegged 2010/11 ending stocks at 730 million bushels, up 55 million bushels from last month while traders were looking for a decline. USDA cut exports by 50 million bushels. USDA also released the first official forecasts for 2011/12 at 900 million bushels, nearly 100 million above pre-report trade estimates. July closed down the 30 cent limit at $6.77 1/4 and December was 26 3/4 cents lower at $6.26.   


Soybean futures closed lower on Wednesday. Weakness in corn weighed on soybean futures today. The Supply/Demand estimates from USDA this morning were fairly neutral for soybean. USDA revised upward its 2010/11 ending stocks forecast to 170 million from 140 million last month. This is the first time since 1998 that USDA has increased its forecast in May. An upward adjustment was expected because of news from China that it planned to slow its import pace during the next few months. For the 2011/12 marketing year, ending stocks were estimated at the very tight level of 160 million bushels, which was slightly below trade expectations. July closed 6 1/4 cents lower at $13.31 3/4 and November was 1 1/2 cents lower at $13.21.    


Wheat futures were strongly lower on Wednesday. The market was pressured by spillover weakness in corn and strength in the dollar index. USDA Supply/Demand estimate for wheat were fairly neutral. USDA left 2010/11 numbers unchanged with ending stocks at 839 million bushels. Many analysts expected USDA would trim exports slightly. USDA’s initial U.S. balance sheet for 2011/12 was a little negative for prices in that USDA’s first survey-based winter wheat crop estimate came in 1.424 billion bu., up slightly from pre-report trade estimates averaging 1.395 billion. The initial ending stocks forecast for 2011/12 came in a 702 million bu., down 16% from the current season. CBOT July closed 39 3/4 cents lower at $7.59, KCBT July was 28 1/2 cents lower at $9.00 and MGE July ended 33 3/4 cents lower at $9.25 1/2.

Cattle futures closed lower on Wednesday. Strength in boxed beef prices on Tuesday and the discount front end futures already hold to the current cash market were initially supportive. But weakness in the crop markets and the $2.18 drop in choice cutouts at midday pushed prices lower. Light cash trade has developed at $112 to $113 this week, down from $115 last week but still $3-$4 above the June contract. June ended 13 cents lower at $109.05 and October was 78 cents lower at $116.30.

Lean hog futures traded lower on Wednesday. The market opened higher on firm pork prices and some recent strength in the cash market. However, strong losses in corn futures have helped drag lean hog futures lower. Losses were limited by ideas of improving demand seasonally as retailers will soon gear up for Memorial Day features. June closed 25 cents lower at $93.23 and August was 80 cents lower at $94.10.