The USDA World Agricultural Supply and Demand Estimate report released Wednesday is bearish for corn, according to Doane Agriculture Services analysts. Corn futures Wednesday are called 10 to 15 cents lower. The. Old-crop ending stocks were estimated at 730 million bushels, up 55 million from last month while traders were looking for a decline.
The first official 2011/2012 projection for ending stocks was 900 million bushels, nearly 100 million bushels above trade expectations. Stocks are expected to remain historically tight. The stocks-to-use ratio is projected to be 5.4 percent in 2010/2011 and 6.7 percent in 2011/2012, according to the report.
The WASDE report was neutral for soybeans, but weakness in corn could pull prices lower. USDA raised the old-crop ending stocks estimate to 170 million bushels from 140 million last month due to reduced exports. However, the first official projection for 2011/12 ending stocks was only 160 million bushels compared to trade ideas of closer to 170 million bushels. Soybean production is projected at 3.285 billion bushels, down 44 million from the 2010 crop mostly due to lower harvested area. Soybean yields are projected at a trend level of 43.4 bushels per acre, down 0.1 bushels from 2010.
USDA’s wheat production number released Wednesday was near trade expectations. Winter wheat production was estimated at 1.424 billion compared to trade expectations of 1.395 billion. However, continued poor weather in the southern and western Plains could cause traders to discount the number.
Lean hog futures are called higher Wednesday. Cash prices have stabilized early this week and pork cutouts were up 89 cents on Tuesday. Much of the premium in summer month futures has eroded. If demand for pork can improve seasonally and market ready hog numbers continue to tighten, cash prices should work higher, according to Doane.
Source: Doane Agricultural Services