Grains sag as focus shifts to demand
The marketplace appears to have already taken into account a lower corn yield forecast from USDA, and appeared at mid-day on Wednesday to be trading only the lower demand numbers released earlier in the agency's Supply/Demand report.
At mid-day, the July corn futures contract was $7.38, 23 cents lower, while the September contract was 42 1/4 cents lower at $6.94 1/4 and the December contract was 21 3/4 cents lower at $6.95 3/4. Meanwhile, soybean futures shared in the downturn, with the July contract trading 26 1/2 cents lower to $16.22 1/4 and the August contract sinking 19 3/4 cents to $15.70 3/4. Wheat shared in the slump, with the July contract trading 4 1/2 lower to $8.00 1/4 and the September contract 9 cents lower at $8.12 1/4.
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Traders focused on the lower demand estimates from USDA Wednesday morning in trading the grains lower; In its WASDE report Wednesday, the agency lowered both feed usage and export demand. And, the trade likely already had a lower yield priced in, leaving lower demand numbers the main focal point as the trade reached the mid-day point on Wednesday.
Still, while the trade's moving the grains lower, farmers still speculate about whether it's a "natural" movement. While some agree a lower corn yield was already priced in, USDA still fell short of reaching a realistic yield tally, says Agriculture.com Marketing Talk senior contributor roaringtiger1.
"The USDA would've done the nation better service if that starting yield would've been more realistic to start with. With record acres (fringe acres included) that 166 was never attainable. We would've had higher prices for corn and lessened demand already. Of course, I would've sold my old corn a long time ago and not had any left to sell at $8," roaringtiger1 says. "The rationing of corn has started much later than it should've and at a much higher price as well."