Summary:
The USDA released its WASDE Report today. Of note was the US Corn production figure that came in at 15.153B bushels which was an increase just north .6B bushels above last month’s figure. Today’s announcement far exceeded trade expectations pushing Corn futures prices to a seven year low. That downside move was short-lived. Futures based for about 30 minutes after the announcement then rallied for the balance of the day. September and December Corn ended the day marginally on the positive side of the ledger. Our support levels of 318 and 329 for each contract held for week with them unable to close below respective support this entire week.
Soybeans posted a sizeable yield of its own with a reported 4.06B bushels versus 3.88B from last month. The trade was expecting 3.94B bushels. Soybeans response was bit more tame than that of Corn. It also dropped on the onset then went on to rally well off of its intraday lows. Although, Soybean futures were not able to finish the day in positive territory. The September and November contracts were down in the area of 1 to 1.50 cents.
Wheat was also above trade expectations. The reported US yield estimates came in at 2.32B bushels, a 60M increase from last month and 50M bushels more than expectations. We have suggested that Wheat may be in the midst of a possible consolidation phase where its downside potential may already be close to being fully discounted. September Wheat rallied 5.75 cents today.
For now the only explanation is that managed money does not believe the yields will be as high as what is being reported.
