In the overnight session, the grains are trading slightly lower with corn down 1 1/4 cents on the September contract, soybeans down 7 1/4 cents and wheat down 4 3/4 cents going into this morning’s pause in trade. The U.S dollar is trading up 1/2 a percent and crude oil is down 70 cents this morning.
On Friday the USDA released their July WASDE report which showed no yield revisions from the previous month. The average trade guess, however, was expecting to see a 1.1 bushel per acre decrease in soybean yield and a 1.4 bpa decrease in corn yield. Traders seemed to brush off the absence of any significant yield revision with expectations that yield is more likely to be revised in the August report anyway. There will be increased focus on today’s crop conditions report as traders look for confirmation that heavy rains have damaged crop development.
In the July WASDE report old crop ending stocks were slashed more than expected for both corn and soybeans. Corn ending stocks fell 97 million bushels to 1.779 billion bushels and soybeans fell 75 million bushels to 255 million bushels. For corn, old crop demand revisions included a 50 million bushel increase to feed use, a 25 million bushel increase to exports and a 25 million bushel increase to corn used for ethanol. The revisions in soybean demand included a 15 million bushel increase in exports, a 15 million bushel increase in crushing’s and a 44 million bushel increase to the residual category.
Global ending stocks for corn fell from 195.19 MMT in June to 189.95 MMT in July. New crop soybean ending stocks fell from 93.22 MMT in June to 91.8 MMT in July. Global wheat stocks saw a surprisingly large increase which was primarily a result of higher beginning stocks and lower feed use out of China. New crop global wheat ending stocks jumped to 219.81 MMT from just 202.40 MMT in June. The increase was well above analyst expectations and played a role in keeping wheat from closing higher on Friday.