Grains end mixed with soybeans and wheat mostly lower, corn higher. Cattle also ended in the red.
Soybeans make new lows after a bearish punch from the WASDE trying to digest not only record yield and production but a much higher ending stocks figure.
Ted Seifried, Zaner Ag Hedge, says prices may have to go lower as a result of not only bigger supplies, but lower demand as exports are lagging.
USDA increased soybean yield to 53.2 bushels per acre and production was also a record and 154 million bushels higher than July, as the agency threw in a surprise 1 million harvested acres.
That put ending stocks at 560 million bushels, which was up 125 million from July and 215 million from last year.
“I think prices might have an $8 in front of it. You hope $8.80 is low enough but I don’t know if it is,” he says.
Meanwhile, Seifried says the report was somewhat friendly for corn compared to expectations.
The corn balance sheet ended nearly 25 million bushels lower which was lower than expected.
USDA lowered acreage by 700,000 and increased new crop exports 75 million bushels, which offset a record yield of 183.1 bushels per acre.
“USDA included acreage in August, moving it up because they felt the data coming from crop insurance was strong enough,” he adds.
So does this just stop the bleeding in corn or can the market build on it?
Seifried says there were some bullish technical signals, “That was a pretty big sigh of relief for the corn market and you saw that reflected in the board in the form of a pretty significant key reversal off new contract lows rallying above Thursday and Friday’s highs. So, your technical traders are going to point to that and say that is maybe a sign we’re getting close to putting in a bottom,” he explains.
However, Seifried is cautious the market can build on it because the ending stocks are still above 2 billion bushels and big crop generally get bigger.
“I am also concerned about the amount of old crop corn that still has to move to market before harvest,” he states.
In addition last week funds covered over 50,000 of their short contract is corn and it failed to rally the market.
Wheat ended mixed with winter wheat futures lower despite USDA lowering production by 26 million bushels, lowering harvested acres by 900,000 and dropping ending stocks by about 28 million bushels.
Seifried says that wasn’t a good sign, “It was disappointing wheat was not able to find some strength along with corn but with ending stocks above 800 million bushels that was still not a very friendly number.”
Cattle futures ended lower failing to extend Friday’s reversal and recovery rally.
He says despite tight cattle supplies, there is a fear about recession and the weakness in the stock market and what that might mean for demand at the meat counter.
