Tuesday was a negative day for our markets. Spot corn closed down 7 1/2, spot soybeans closed down 6, harvest winter wheat closed down 2 3/4 and harvest spring wheat closed down 4 1/2. In the overnight trade corn and the wheat market are now positive with soybeans still on the negative side. Oil closed up $1.00 yesterday at $73.32 per barrel. It is weaker in trading this morning with it now valued at $72.47 per barrel. Our dollar started out yesterday morning at $0.698 US and then went up to $0.700 US during the trading day. It has stayed within that range since then and is currently valued this morning at $0.699 US.
It seemed like our markets were looking for some support from the USDA yesterday and they did not get it with the monthly WASDE report. Instead all of our commodities turned lower and closed just over 10 cents off their highs from earlier in the day.
The USDA did not change the US balance sheet for the corn or soybean markets which was a bit of a surprise. The marketplace was looking for corn stocks to decrease with the possible increase in both corn exports and corn usage for ethanol in the US. We should note though that both of these numbers were manipulated over the previous two WASDE reports and as such the USDA felt best to leave them alone this time.
Soybean production levels for South America were decreased but not enough to drive prices higher. Production was left unchanged in Brazil at 169 million tonnes however it was cut in Argentina by 3 million tonnes down to 48 million tonnes. It was also decreased in Paraguay by 500 thousand tonnes down to 10.7 million tonnes. Even with these decreases South America will still produce a record amount of soybeans this year. World stocks are still projected at record levels for this year. This report was definitely slightly bearish for the soybean market.
Production levels for corn in both Brazil and Argentina were decreased by 1 million tonnes. The marketplace was probably looking for a larger decrease in Argentina then was reported. Once again imports into China were decreased and they are now projected under 10 million tonnes for this year which is less than half of the previous year’s imports. This report was also slightly bearish for the corn market.
The USDA did decrease domestic wheat stocks slightly and they also decreased their projection for Russian exports this year. They even decreased world stocks down to a 17 year low. This was not enough to support the wheat market as it remains well supplied around the globe.