Corn futures posted double-digit gains in post-USDA trade on Tuesday, as the new-crop outlook tightened considerably.
In response to overly wet conditions in the American Midwest, the USDA hacked its 2019 U.S. corn production estimate by 1.35 billion bu from last month to 13.68 billion, mainly driven by a 10 bu reduction in the average yield estimate to 166 bu. Projected 2019-20 corn ending stocks were slashed by 810 million bu to 1.67 billion – below most trade estimates. Further, global corn ending stocks were cut by more than 24 million tonnes from last month to 290.5 million. July corn gained 12 cents to $4.27 ¾ and December added 12 ½ cents to $4.36 ¼.
The gains in corn helped to power wheat futures higher. The USDA made relatively minor changes to its old- and new-crop U.S. wheat supply demand estimates, with old-crop ending stocks trimmed 25 million bu from last month while new-crop ending stocks were down 69 million bu. World wheat ending stocks for 2019-20 came in at 294.34 million tonnes, up from 293.01 million last month and 276.57 million in 2018-19. Monday’s USDA crop progress report showed the U.S. winter wheat harvest at 4% complete as of Sunday, behind 10% on average. July Chicago wheat gained 10 ½ cents to $5.18, July Kansas City closed 4 ½ cents higher at $4.57 ½ and July Minneapolis edged a penny higher to $5.69 ½.
Soybean also benefited from the strength in corn, although the gains were quite modest. Old- and new-crop soybean ending stocks were both revised 75 million bu higher from last month. Unlike for corn, the USDA made no changes to its 2019 U.S. soybean yield and production estimates. July soybeans were up ¾ of a cent at $8.59 ¼ and November climbed 1 ¼ cents to $8.87.
Live cattle futures ended higher today. Lean hogs were weaker.
Source: DePutter Publishing Ltd.
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