Headlines:

  • Corn, wheat prices gain as US data spur ideas of market ‘paradigm shift’
    Corn and wheat futures recovered from early losses as a much-watched US report forecast an end to the build in world grain supplies, although soybeans struggled to follow suit, on upgrades to world stocks expectations. Corn futures for July gained 2.0% in Chicago at one point, after the US Department of Agriculture, in its first estimates for world crop balance sheets in 2017-18. July wheat futures recovered from negative territory in the run up to the data to stand up 1.4% on the day. The gains reflected USDA expectations, released in its WASDE crop report, that world grain stocks will fall back next season, after a five-year spell in which they have soared more than 50% to record highs spurred by a run of bumper harvests. Corn futures for July closed at $3.73 ¾ a bushel, a gain of 1.8%, while wheat futures for July ended up 0.8% at $4.31 ¾ a bushel.

 

Summary:

Despite coming in a bit lower than last month’s Soybean Ending stocks figure, market participants did not see enough to move Soybean futures into positive territory today. Pressure from South American crops also helped put a lid on Soybean advances today. At the onset of today’s WASDE report release the market reaction was higher but as the day progressed Soybean relinquished all of its gain and closed the day in negative territory. The USDA’s ending stock figure for Old crop Soybean can in at 435 MB vs 445 MB from last month. Today’s number was also about 3 MB below the average trade estimates. The Ending stock figure for the Corn old crop was 2.29 BB vs 2.32 BB from last month. The average trade estimate was at 2.32 BB. Old crop Wheat estimates were at 1.15 BB which was the same as last month. The Average trade estimate was at 1.16 BB. The new crop Soybean was well below trade estimates of 555 MB coming in at 480 MB. New crop Corn came in at 2.11 BB vs the 2.12 BB average trade estimate. Wheat Ending Stocks were at 914 BB vs the trade average estimate of 1.01 BB.

Worldwide, Corn production is forecasted lower than a year ago with the largest declines coming from China and the US. There was a bit of an offset from Canada and the EU. Global Corn use is up about 1% and global Corn imports are forecasted to increase about 7 million tons. Corn futures were mixed today moving up initially then softening midday but closing the day strong. Both Corn and Wheat finished the day in positive territory when the dust settled.