Latest reports mostly bearish for the ag markets

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The Grain Stocks report depressed corn futures Monday. The quarterly USDA Grain Stocks report stated September 1 U.S. corn inventories at 824 million bushels, which easily topped forecasts averaging around 680 million. Thus, it wasn’t at all surprising to see futures react badly, since that implies 2012/13 carryout stocks were larger than expected. December corn fell 12.5 cents to $4.415/bushel at the Monday close, and May dropped 12.25 cents to $4.6225.

The soy complex dove in response to the USDA data. CBOT traders expected the Grain Stocks report to state September 1 U.S. soybean stockpiles at 124 million bushels, but the USDA put that actual figure at 141 million. The resulting breakdown in soybean futures obviously weighed heavily upon product prices as well. November soybeans plunged 37.0 cents to $12.8275/bushel at Monday’s settlement, while October soyoil plummeted 0.68 cents to 40.83 cents/pound, and October soymeal dove $10.0 to $409.9/ton.

The reports were seen as mixed for the wheat outlook. The Grain Stocks report stated early-September U.S. wheat stocks at 1.855 billion bushels, whereas a result around 1.91 billion was expected. The Small Grains Summary cut USDA estimates of hard red winter wheat production and raised the figures for spring wheat and soft red winter. Those explain the differing post-report reactions at the different exchanges. December CBOT wheat settled 4.5 cents lower at $6.785/bushel in Monday afternoon action, while December KCBT wheat surged 7.75 cents to $7.395, and December MGE futures skidded 2.75 cents to $7.2875.

Cattle futures proved surprisingly weak Monday. Despite significant cash strength last Friday, live cattle futures turned downward this morning. That may have reflected the bearish results of the Hogs & Pigs report last Friday. Moreover, beef prices took a surprising dive last Friday afternoon, thereby suggesting current wholesale demand is not as strong as hoped. October cattle futures settled 0.40 cents lower at 127.85 cents/pound late Monday afternoon, while December sank 0.10 cents to 131.97. Meanwhile, October feeder cattle dipped 0.02 cents to 164.10 cents/pound, and January inched up 0.15 to 164.00.

Hogs futures reacted poorly to the Hogs & Pigs report. Swine traders expected a bullish result on last Friday’s quarterly USDA Hogs & Pigs report, but it had decidedly bearish implications. Actually, traders probably harbor doubts about the results, since futures did not fall as sharply as was seemingly implied by the report. October hog futures tumbled 0.95 cents to 91.97 cents/pound to start the week, while December fell 1.50 cents to 86.62.

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