This was an active trading week as markets anticipated the Grain Stocks report released on Friday. This report is different than the usual World Agricultural Supply and Demand Estimates because USDA only reports on supply in this report, not demand. The report will likely be seen as bullish for both corn and soybeans and bearish for wheat.
Weekly exports for corn on Thursday came in at 575,000 bushels as trade was expecting something above 750,000. Luckily, the quarterly grain stocks report came in at 1.74 billion bushels for old stocks which was less than the trade estimate of 1.754 billion bushels. This is good news for a market looking at another year of very large production.
Soybean trade resulted in the sale of 1.692 million tons which was higher than trade estimates of 1.1 million tons. Old crop stocks of soybeans were reported at 197 million bushels, lower than the 201 million bushel trade estimates.
Wheat exports came in within estimates and most of the week’s price movement was positioning ahead of the grain stocks report. On that report, old crop wheat stocks totaled 2.53 billion bushels, over the 2.4 billion bushel trade guess.
In cattle futures, trade saw a steep drop off for live and feeder cattle. The bears are in full control of this market and that trend will likely hold strong into 2017. That is not to say that rallies won’t happen between now and then, but the market is telling us that it is more focused on the long-term number of cattle coming to market and entering feedlots. Last year, the meat industry had a weight problem with very large carcasses. Today they have a numbers and retail price problem. Wholesale beef producers were only taking 41.9 percent of the retail dollar in July and 42.8 percent in August. Compared to the peak at 58.2 percent set at the height of tight supplies in 2014, it is clear that lower prices are headed our way. The all-time low in wholesale retail dollar share is 41.0 percent which was set back in 2009.
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