In the overnight session the grains are continuing lower with corn down a penny, soybeans down 3 ¾ cents and wheat trading down 5 ½ cents. Crude oil is trading lower and the U.S. dollar is higher by over ¾ of a percent this morning.
The trade reacted to the WASDE report with some selling on Wednesday after the USDA raised ending stocks for wheat and corn. Old crop corn ending stocks were increased 25 million bushels after corn used for ethanol was revised lower. Old crop wheat ending stocks increased by 3 million bushels after exports were revised 5 million bushels lower and imports fell by 2 million bushels as well. Soybean ending stocks had the largest revision, getting cut 20 million bushels to 330 million bushels carryout. Soybean ending stocks were cut below the average trade guess which was looking for ending stocks of 339 million bushels. However, a 10 million bushel increase in crushing and a 10 million bushel increase in exports helped surprise the market, making soybeans the relative strength in yesterday’s trade session.
Wheat provided the biggest surprise for new crop ending stocks. New crop wheat production was lifted 34 million bushels which was partially offset by a rise in feed and residual by 15 million bushels. This lifted new crop wheat ending stocks from 793 million bushels in May to 814 million bushels of ending stocks in June. Soybean ending stocks fell 25 million bushels to 475 which was primarily a result of smaller beginning stocks, and new crop corn ending stocks increased 25 million bushels which was also a result of smaller beginning stocks.
More bearish news was released this morning from Conab, Brazil’s government supply agency. The organization lifted their 2014/15 corn and soybean production forecast for Brazil. Corn production is expected to jump from 78.59 million metric tons to 80.21 million metric tons and soybean production is now forecast at 96.04 million metric tons.
Export sales were released this morning with corn reporting 495,600 metric tons of old crop sales which was on the low side of analyst expectations. Soybeans booked 164,000 metric tons of old crop sales which was another strong week for the oilseed.
