Bearish reaction to USDA reports

Market Line July 12, 2010 Wheat futures ended a six day rally Friday following USDA reports, which put U.S. wheat production and ending stocks higher than trade expectations. Total U.S. production was at 2.2 billion bushels with ending stocks at 1.1 billion bushels. Hard red spring wheat production was pegged up three percent from last year. But USDA also lowered world wheat production and carryout due to the weather problems in Canada and the Black Sea region. Al Kluis of Kluis Commodities in Minneapolis thinks that although prices were down Friday there is still upside potential due to the nearly seven million metric ton reduction in world ending stocks.

Kluis: “When you are in a global market that type of month-to-month change is very positive and I would look for probably additional cuts in that in future projections.”

Kluis thinks USDA’s Canadian production number is too high.

On Friday Chicago September wheat down 10 ½ at 5-38. September corn down two cents at 3-83 ½. Portland soft white wheat three to five cents lower at mostly 4-73. New crop August soft white eight to ten cents lower at 4-72 to 4-75. Club wheat premium mostly 37 cents. HRW 11.5 % protein down nine cents at 5-46. DNS 14% protein down 11 cents at mostly 6-65.

Cattle futures were lower Friday. Profit taking was cited and pressure came from lower boxed beef prices this past week. August live cattle down 70 cents at 90-20. August feeders down 40 at 113-20. August Class III milk down 13 cents at 14-53.

I’m Bob Hoff and that’s Market Line on Northwest Aginfo Net.

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