Market News

Dismal losses tied to corn numbers

Soybeans, meal and oil all closed lower mainly because of spillover pressure from corn, but there’s also harvest pressure noted in soybeans. The soybean quarterly stocks, at 215 million bushels, are below expectations, so the number was actually neutral to friendly. DTN says that actually limited downside in soybeans, but sharply lower corn futures made any soybean recovery unlikely. Harvest reports seem to indicate solid soybean yields in the Western Corn Belt so far. Exports reported this week were the largest since January so demand appears to be brisk. Harvest pressure may result in continued pressure into next week.

For most of the Friday trading session, many corn contracts were down the 40-cent limit, and closed that way. Friday morning’s Quarterly Grain Stocks report was bearish for corn. Corn stocks were higher than anticipated, plus there was no help from negative outside markets. September 1 corn stocks are 1.128 billion bushels. That’s more than the highest industry estimate, and well over the average trade guess of 964 million bushels. Allendale’s David Kohli was baffled by the fourth quarter corn feed usage number of 439 million bushels, the lowest since 1976. A corn sale to South Korea feed manufacturers of 176,000 metric tons was noted, but seemed to cause little if any reaction.

Wheat was also sharply lower Friday. DTN says the wheat numbers Friday morning were overall negative. Even though the production number was smaller, stocks were bigger, at 2.15 billion bushels vs. expectations of 2.035 billion. Total wheat production came in below expectations at 2.008 billion against expectations 2.04 billion. Even though dry weather in the hard red winter wheat belt remains a concern, it didn’t relieve spillover pressure from corn, nor could it wave the negative effects of the higher wheat stocks number. The exception Friday was Minneapolis wheat, reacting positively to demand for quality milling wheat. And spring wheat production declined from prior estimates. Losses at that exchange were not as steep.