Crop markets sharply lower after WASDE report

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Corn prices proved vulnerable in response to the July WASDE. In that report, USDA revised the 2013/14 ending stocks up to 1.246 billion bushels from 1.146 billion last month. The new-crop ending stocks are now forecast at 1.801 billion compared to 1.726 billion last month. Favorable weather outlooks for corn pollination also weighed on the market. USDA maintained the yield forecast at 165.3 bu/a. USDA increased its forecast for global corn ending stocks for 2014/15 to 188.0 mmt from 182.65 mmt last month. September corn lost 8.00 cents lower to $3.7825/bushel and December descended 8.0 cents to $3.8475.

Soybean prices turned decisively lower following the release of the July WASDE. The nearby August contract fell to the lowest level of 11.595 per bushels during the session as USDA revised the 2013/14 ending stocks up to 140 million bushels from last month at 125 million. For the new crop, the ending stocks forecast was also increased from 325 million to 415 million due to the record production forecast at 3.8 billion bushels. August futures closed 37.00 cents lower to $11.9575 and November futures traded down 18 cents to$10.75. August soyoil fell 0.71 cents to 36.77 cents/pound, while August soymeal tumbled $11.5 to $387.8/ton.

Wheat futures traded sharply lower after the monthly WASDE report was released. CBOT front-month SRW futures posted the largest weekly decline since June 2012 and dropped 9.3% on the week. KC hard red winter wheat also fell 6%. Surging supplies and reduction in demand added pressure to the markets. USDA raised 2014 US by 50 million to 1.992 billion bushels. Exports are forecast down to 900 million from 1182 million last year. Accordingly, 2014/15 ending stocks rose to 660 million bushels, up 70 million from 2013/14. September CBOT wheat plunged 22.5 cents to $5.26/bushel, while September MGE wheat dove 11.0 cents to $6.3625/bushel and September KC wheat dropped 13.0 cents to $6.28/bushel.

Cattle futures experienced a choppy trading session on Friday. Prices began mixed, turned lower at midday and then rallied in the last hour to close higher. The rebound ended the sharp price decline the previous three days. Even so, August futures ended down nearly 6 cents/pound for the week. A wave a profit-taking from trading funds and speculative sectors hit the market hard. Cash cattle traded at $156 in Nebraska, down $1 to $2 from Wednesday and down $2 from last week. In Kansas, fed cattle traded at $156, down $2 from last week while Texas cattle were $2 to $3 lower to $155 to $156. Beef prices were mixed at midday. The Choice cutout fell $0.88 to $251.29/cwt while Select was $1.14 higher to $244.66 another new high. The cattle market stabilized and began to recover following USDA’s supply demand update. USDA raised the fed steer price forecast for Q3 and Q4. August live cattle settled 1.20 cents higher to 149.12 cents/pound while December closed 0.72 cents higher to 153.00 cents. Meanwhile, August feeder cattle were 0.47 cents higher to 211.07 cents/pound.

Hog futures ended the week with mostly higher quotes. Although wholesale losses caused the sustained slippage in Chicago prices during the mid-session, steady cash quotes seemingly provided the support. Estimated daily slaughter number at 275000 was much lower than a year ago. August hog futures gained 0.73 cents at 128.67 cents/pound and December rose 0.4 cents to 104.35 cents.

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