Corn futures closed lower on Wednesday. Today’s WASDE report proved bearish for the corn market. Prices tumbled as USDA lowered production output 52 million bushels to 10.727 billion bushels. However this estimate was approximately 300 million bushels above trade expectations of 10.4 billion bushels. As a result of today’s supply and demand report, the market responded negatively trading down by as much as 15 cents upon release of the report. However, prices have moderated from early morning lows. December corn closed down 8 ¼ cents while March closed down 8 cents.
Soybean futures closed 43 to 44 cents higher on Wednesday. Soybean futures extended gains throughout the day session as the market responded quickly to USDA’s lowered production and ending stocks estimates. USDA pegged production estimates at 2.634 billion bushels, 58 million bushels below the previous month’s estimate. Both old crop and new crop ending stocks were lowered during the September WASDE report. Old crop (2011/12) ending stocks were lowered 15 million bushels while new crop ending stocks were lowered 72 million bushels. Soyoil and soymeal are traded sharply higher as well. Soyoil closed up 61 to 63 points while soymeal closed 14 to 16 dollars higher.
Wheat futures closed higher on Wednesday. Wheat futures rebounded from what seemed to be a slightly bearish supply and demand report on spillover support in the soybean market and trader short covering in the soft red winter wheat market. There were no changes made to 2012 production estimates in this report. However, U.S. ending stocks were reported slightly below trade expectations at 698 million bushels. Global ending stocks were reported 460,000 tonnes lower well below expectations of at least 20 million tonnes. December wheat at CBOT closed 7 ¼ cents higher; KCBT closed 8 ½ cents higher; and MGE closed 16 ½ cents higher.
Live cattle futures closed higher on Wednesday. Buying interest picked up in the cattle complex shortly after midsession on strength in the wholesale beef prices and higher cash price expectations. Both choice (up 16 cents) and select (up 61 cents) were higher at midday which increased traders’ confidence that cash prices have the potential to be steady to higher versus last week. This week’s smaller show list sparked speculative talk of tighter supplies, which also helped to boost market prices. October closed 60 cents higher while December closed 73 cents higher.
Lean hog futures closed higher on Wednesday. Hog futures bucked pressure from poor market fundamentals to close higher across the board today. Initially futures were supported by short covering in the front month contract but buying interest picked up as corn prices faltered and cattle futures picked up steam. Supply continues to outpace demand, placing downward pressure on prices, but traders suspect prices are approaching support levels. Traders will keep a watchful eye on prices in the grain complex because although corn prices are trading lower, prices remain at record levels along with record soybean meal prices. October closed 70 cents higher while December closed 93 cents higher.