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Wheat, Soybeans End Down Double-Digits

07/11/2014 @ 8:41am

DES MOINES, Iowa (Agriculture.com)--The WASDE/USDA Reports pushed some of the CME Group corn, soybean, and wheat contracts to new lows Friday. Essentially, the USDA released higher U.S. stocks numbers than expected. This is bearish news for the farm markets.


At the close, the Dec. corn futures settled 8 cents lower at $3.84. Nov. soybean futures closed 18 cents lower at $10.75. Sep. wheat futures finished 22 1/2 cents lower at $5.26. The Dec. soymeal futures contract closed $4.80 per short ton lower at $345.00. The Dec. soyoil futures finished $0.64 lower at $36.96.


In the outside markets, the NYMEX Brent crude oil is $2.30 per barrel lower, the dollar is lower, and the Dow Jones Industrials are 16 points higher. Sal Gilbertie, Teucrium Trading, says that today’s WASDE report has confirmed the widely held belief that supplies of the major grains will be more than adequate in the coming year.


"Many in the trade believe yields may still have some room to be raised, especially for corn, although projected usage declines in corn seem a bit surprising and future upward usage revisions could potentially be offset by increased future yield projections," he says.


Overall, today’s report, coupled with current near-perfect growing conditions across the globe, is good news for consumers and end users of grains because prices are already being driven quickly toward the low end of the USDA’s projected on-farm price ranges for corn and wheat, Gilbertie says. 


"Soybeans may have a bit more room on the downside given the large increase in projected new-crop ending stocks. However, current low-end range pricing does not bode well for unhedged farmer producers or active speculators who have not yet established short positions," Gilbertie says.

 

He adds, "It seems likely some consumer buying and producer-hedger short covering could potentially begin to enter the markets at the current low-end price range, as might asset allocator buying for investors needing to reweight grains in their portfolios."

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