Corn futures are sharply lower at midday. The market is being pressured by the bearish Supply/Demand report released this morning. 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. On the production side USDA plugged in a trend yield of 158.7 bushels per acre. The trend yield is adjusted 3 bushels lower from the overall trend due to the current planting delays. But ending stocks in 2011/12 are expected to grow to 900 million bushels, nearly 100 million above pre-report trade estimates. July is 28 1/2 cents lower at $6.78 3/4 and December is 21 cents lower at $6.31 3/4.   


Soybean futures are trading lower at midsession. Weakness in corn is weighing on soybean futures following the Supply/Demand forecasts for soybeans that were neutral. USDA revised upward its 2010/11 ending stocks forecast to 170 million from 140 million lat 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 is 10 1/2 cents lower at $13.27 1/2 and November is 5 1/4 cents lower at $13.17 1/4.    


Wheat futures are strongly lower at midday. The market is being pressured by spillover weakness in corn following a fairly neutral Supply/Demand report for wheat. 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 is 22 3/4 cents lower at $7.76, KCBT July is 10 3/4 cents lower at $9.48 1/2 and MGE July is 10 3/4 cents lower at $9.48 1/2.     

Cattle futures are trading mixed at midsession. Strength in boxed beef prices and the discount front end futures already hold to the current cash market were supportive. Light cash trade has developed at $112 to $113 this week, down from $115 last week but still $2-$3 above the June contract. Deferreds are mostly lower with sharp losses in corn raising ideas that beef production will increase. June is 63 cents higher at $109.80 and August is 53 cents higher at $111.25.

Lean hog futures are lower at midday. 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 were lower. Losses are being limited by ideas of improving demand seasonally as retailers will soon gear up for Memorial Day features. June is 23 cents lower at $93.25 and August is 65 cents lower at $94.25.


Cotton futures are trading strongly lower at midsession. Strong losses in other crop markets have spilled over into the cotton market. USDA raised their old-crop ending stocks estimate to 1.75 million bales compared to 1.60 million last month. The first official estimate for 2011/12 ending stocks was 2.50 million bales as production is projected to be near last year, but exports to be down 2 million bales. July is 347 points lower at 147.93 cents and December is 322 points lower at 122.70 cents.