Corn ends slightly higher Thursday, with wheat mixed and soybeans lower. Cattle also ended mostly lower, with hogs higher.
Dave Chatterton of Strategic Farm Marketing says corn closed slightly higher after a rather benign WASDE.
USDA made only slight revisions to U.S. corn ending stocks lowering old crop 50 million bushels to 1.365 billion bushels, due to higher exports. That resulted in lower carryout for new crop at 1.75 billion.
However, he says the corn market isn’t trading like carryout is that tight and neither have the spreads.
USDA left South American corn and soybean production unchanged, which was a little bit of a surprise says Chatterton.
Private estimates have been raising the Brazilian corn crop estimate above USDA’s 130 MMT mark due to the larger safrihna corn crop.
Chatterton says CONAB also raised Brazil production prior to the WASDE release for both corn and soybeans. CONAB is now projecting Brazil to produce 128.3 MMT of corn vs 126.9 MMT previously and vs USDA’s estimate of 130 MMT. CONAB left Brazil’s corn export pace from last month at 34 MMT vs 38.5 MMT last year.
USDA left domestic balance sheets unchanged for soybeans but the market fell with rumors EPA would be releasing the Renewable Volume Obligations on Friday and at only 4.65 billion gallons for bio-mass based diesel.
“If that’s true its a real disappointment for the market,” he says.
Winter wheat futures ended lower despite USDA lowering new crop ending stocks by 25 million bu. to 898 million bu. as a result of higher exports. Plus, the agency left winter wheat production unchanged at 1.921 billion bu.
Cattle futures were lower in all but the June live cattle contract, despite higher cash and cutouts.
Cash developed at $235 in the South, up $4 to $5 from last week and the North at $380, which was steady.
Boxed beef values were up $2.50 on the Choice at noon at $377.26.
Chatterton says this technical action in the futures is concerning but the market but may be somewhat tied to concerns about labor and slower chain speeds at plants due to ICE raids.
Lean hogs were higher with more contract highs in July on back on the board. He says the market is overbought but as long as cash and cutouts stay strong the market will be well supported.
