Downturn resumed in the crop markets

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Corn futures gave up early gains and proved vulnerable on Thursday morning. Pressure was from the weather forecasts that call for below normal temperatures and normal to above normal precipitation for the next week to ten days, which is nearly ideal for corn pollination. Ahead of the USDA’s report, trade expects USDA to boost 13/14 ending stocks by about 85 million bushels to 1.232 billion and 14/15 ending stocks by 50 million to 1.774 billion. New crop S/D will hinge largely on 2014 yield estimate. USDA usually doesn’t revise the yield up in July, however, the market is already thinking higher than USDA’s current 165.3 bushel yield. Weekly export sales for old and new crop were in line with trade estimates. September corn moved 5.75 cents lower to $3.8575/bushel and December was 5.25 cents lower to $3.9275.

The soybean market was mixed on Thursday. Rising demand gave market support as large exports sales were reported this morning to China and unknown destinations. However, promising harvest prospects are likely to continue adding pressure to the market. Weekly export sales topped the pre-report expectations at 650K tonnes. China customs reported its June soybean imports up 7% from last month to 6.39 mmt. Asian palm oil gains seemingly boosted soyoil. August soybeans lost 7.5 cents to $12.39/bushel, and November fell 6.5 cents to $10.9725. August soyoil surged 0.16 cents to 37.30 cents/pound, while August soymeal descended $2.5to $403.6/ton.

The downturn resumed in wheat markets after posted a short period of rally Thursday morning. Winter wheat harvest in Kansas is continuing and is expected to finish in a week if the weather cooperates. USDA will issue their estimate of wheat production in 2014/15. Analysts are expecting USDA to boost all wheat production to 1.972 billion bushels from June forecast at 1,943 million bushels with spring and durum wheat at 544 million and 59 million. September CBOT wheat futures lost 1.25 cents to $5.50 bushel, September KCBT wheat futures dropped 6.25 cents to $6.47/bushel and September MWE futures skidded 4 cents to $6.4375.

Cattle futures are sharply lower at midday. Futures are under pressure as trading funds and other speculators unwind long positions sparking the steepest futures setback in several weeks. Weakness in the stock market is also seen fueling the selling. Additional cash market trade has surfaced this morning at lower values. Nebraska cattle are changing hands at $156, down $1 to $2 from Wednesday and down $2 from last week. Similarly, Kansas is trading at $156, also down $2 from last week. The cutouts were mixed on Wednesday. The Choice cutout was 59 cents higher to $250.57/cwt while Select was down 36 cents to $242.26. Traders are concerned that beef demand will begin to soften seasonally and due to record high prices. August live cattle are 1.60 cents lower to 149.20 cents/pound while December is 1.65 cents lower to 152.40 cents. Meanwhile, August feeder cattle are 2.10 cents lower to 211.50 cents/pound.

Hog futures fell along with the declines of cattle futures. Although the cash hog and wholesale pork markets moved higher, traders seem to becoming increasingly worried about the potential for surging supplies during the days ahead. Rising weights certainly seem to be pointing in that direction. August hog futures were down 1.7 cents at 127.9 cents/pound and December was down 1.975 cents to 103.475 cents.


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