Corn futures still sliding Wednesday morning

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Corn futures continued sliding. If the weakness holds through the day it will mark the seventh consecutive session of lower closes. The market was depressed by the highest early July crop rating since 1999 at 75% good to excellent and forecasts for favorable weather as the crop moves into pollination. However, sizeable sales to unknown destinations and Japan reported by exporters this morning provided some support to avoid sustained losses. Traders are anticipating USDA to raise the yield before the Friday’s report. September corn dropped 6 cents to $3.9625/bushel, while December dove 5.5 cents lower to $3.9875.

Soybean futures started the day on a down beat and continued on the journey of the eighth straight losing session. November futures touched the lowest level since early February. It would be easy to believe that the high yield potentials are adding pressure to the market. Brazil government raised its 13/14 soy production estimate to 86.27 mmt from 86.05 mmt in June. Ahead of the Friday WASDE report, USDA is expected to boost the U.S. 2014/15 ending stocks projection to 415 to 420 million bushels, up from 325 million from last month. August soybeans were down 1.75 cents to $12.4675/bushel, and November moved 7 cents lower to $11.0925. August soyoil edged 0.39 cents lower to 37.49 cents/pound, while August soymeal gained $1.6 to $403.5/ton.

Wheat futures were lower on Wednesday morning. Nearby futures have fallen to the lowest level in nearly four years. Winter wheat harvest, favorable spring wheat prospects in the U.S. and uncertain export demand are weighing on the market. On Friday USDA will issue their first spring and durum wheat production estimates of the season and update winter wheat production as well. USDA is expected to lower winter wheat production, with spring wheat production at 536 million bushels and durum at 60 million (trade averages), but total wheat production would edge up 27 million from USDA’s June estimate to 1.969 billion. The increase in production would also boost the ending stocks projection from last month. September CBOT wheat futures lost 4.75 cents to $5.515 bushel, September KCBT wheat futures fell 9 cents to $6.66/bushel and September MWE futures dove 10 cents to $6.47.

Cattle futures have turned lower after trading higher early on Wednesday. Initially, the cattle market garnered buying support from higher beef prices. Beef prices climbed to new all-time highs again on Tuesday as the Choice cutout was $1.80 higher to $249.98/cwt. However, the trade remains nervous that high prices will begin to throttle beef demand, particularly as during mid to late summer, a time when beef demand tends to soften. The trade is also anxious to see how the cash market responds to a higher supply of market-ready cattle this week. August futures are at about a 4 cent/pound discount to last week’s cash trade which is supportive. August cattle are 0.75 cents lower to 152.80 cents/pound while December is 0.65 cents lower to 154.70 cents. Meanwhile, August feeder cattle are 0.12 cents lower to 215.77 cents/pound.

The hog futures prices retreated as the cattle futures gave up early gains and moved lower. The weekly average weight at 284.2 pounds was down from a week ago at 285, but up year-over-year. Futures prices benefited from the higher cash prices and wholesale prices. August futures are testing the most recent reaction low at 129.50 cents/pound. If that level fails, next support is the mid-June low at 126.00. August hog futures are down 0.4 cents at 129.45 cents/pound and December is up 0.725 cents to 104.975 cents.

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