Corn futures settled lower Tuesday. The selling pressure mounted through the day as the market reacted to USDA supply and demand forecast. In this month’s update USDA left 2011/12 corn ending stocks unchanged from last month at 801 million bushels, but expectations were for about an 80 million bushel cut. Corn planting progress is racing ahead of normal at 7% as of Sunday compared to only 2% for the five-year average. May corn settled 14 1/4 cents lower at $6.34 3/4. The December contract was 6 3/4 cents lower at $5.43 1/2.
Soybean futures settled lower on Tuesday. USDA issued its April Supply/Demand report on Tuesday morning. The initial reaction was bullish as USDA reduced its forecast for global soybean production by 5 million tonnes, which was more than expected. Prices turned lower after midday when corn and wheat prices fell back, drawing soybeans with them. Short-term technical selling pressure erupted. Global economic worries fed selling in the stock market and for crude oil, and that selling added to traders’ urgency to reduce risk via some soybean sales. May futures closed 5 cents lower at $14.26 while November dropped 17 1/4 cents at $13.64 3/4.
Wheat futures closed sharply lower Tuesday. Markets opened firm on what was seen as a price-friendly USDA supply/demand update this morning. They reduced estimated U.S. ending stocks by exactly what the trade was expecting, but reduced estimated global ending stocks by more than three times the average pre-report trade estimate. But MGE futures quickly lost early gains and moved to the minus side on rapid planting progress in spring wheat. Then KCBT wheat fell to the minus side on continued improvement in crop conditions and CBOT wheat moved lower on decreasing odds that frost expected this week will do any significant damage. CBOT May was 17 1/4 cents lower at $6.25 3/4, KCBOT May closed 19 cents lower at $6.41, and MGE May closed 13 1/4 cents lower at $8.33 3/4.
Cattle futures finished lower Tuesday. The cattle market came under increased pressure as the day progressed. Weakness in the outside markets prompted renewed liquidation. Concern over the state of beef demand also continues to weigh on the market. USDA’s monthly supply and demand update added to the negative tone as USDA boosted imports and cut exports. USDA also adjusted the annual price forecast for 2012 down 50 cents per cwt from last month to $127 due to the recent sharp decline in prices. June cattle futures settled $1.47 lower at $114.30 and August was $1.07 lower at $117.30.
Lean hog futures closed mixed on Tuesday. Hog futures prices took a beating in early trade on Tuesday, but prices rallied toward the end of the session. Hog futures were pressured by both weak cash hog and pork prices and big declines in outside markets. Cash hog prices and cutout values are very close to the lows for the year. Prices typically rise from now through May, but so far this year prices have not followed the seasonal pattern. The May contract closed at $93.10, down 90 cents. June was 25 cents lower at $93.35, but October closed with a 10 cent gain, settling at $86.15.
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