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USDA Data Pushes Farm Markets Down

DES MOINES, Iowa ( WASDE June Supply/Demand numbers pushed the CME Group corn, soybean, and wheat markets to a lower close Wednesday.

The July corn futures contract settled 4 1/2 cents lower at $4.41. The Dec. corn futures finished 3 cents lower at $4.41. The July soybean futures contract closed 17 cents lower at $14.45. The Nov. soybean futures finished 8 3/4 cents lower at $12.20. July wheat futures ended are 12 cents lower at $5.89. The July soymeal futures contract settled $2.20 per short ton lower at $482.30.The July soyoil futures closed $0.52 lower at $38.42. 

In the outside markets, the NYMEX Brent crude oil is $0.50 per barrel higher, the dollar is higher and the Dow Jones Industrials are 108 points lower.

Today’s USDA Stocks Report is largely a nonevent, with the notable exception of a clear disconnect between the higher corn yield anticipated by the trade and the unchanged yield of 165.3 bushels an acre estimate in today’s report, according to Sal Gilbertie, Teucrium Trading. 

"Ironically, the USDA’s delay in raising yield estimates could be in response to the near-perfect weather conditions experienced so far this year; any deterioration in weather patterns through pollination in July would allow the USDA to keep its yield projections relatively stable," Gilbertie says. 

Soybean numbers had no surprises with tight old-crop inventories continuing, he says. "Wheat expectations are based largely upon the current noncompetiveness in the global markets of U.S. wheat; U.S. food use and exports were reduced accordingly. The global balance sheet of wheat remains well supplied by more than adequate non-U.S. global production. Worth noting is the global increase in demand for both corn and wheat which seems to indicate lower prices are stimulating increased demand."

Dustin Johnson, EHedger grain analyst, says the report wasn't much of a surprise, just another confirmation that a big crop is coming.  "The reaction to sell corn, sell wheat, but keep soybeans supported is the same trend we have seen for the past month.  That is the favorite of the funds and the real story of why these relationships are behaving the way they are," Johnson says.

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