06/12/06 Friendly report but wheat drops

Marketline June 12, 2006 Wheat futures started off with a bang Friday on a friendly USDA report which cut U.S. winter wheat production four percent from a May forecast and pegged 2006-2007 wheat ending stocks at only 417 million bushels. The reduction was primarily in hard red winter wheat. But Christopher Modoff of R.J. O'Brian at the Chicago Board of Trade, says it was the funds that sent the market down. Modoff: "Certainly the selling in Kansas City and Chicago took over and we saw the market see some fund liquidation and that really worked ourselves to the downside and we saw massive fund selling and the market closed near its lows. Just big liquidation in the wheat market and that weakness obviously spilled across the entire floor." On Friday July Chicago wheat was down 11 cents at 3-72 ½. July corn down 3 ½ at 2-42. Portland cash white wheat for second half June steady to four cents lower at mostly 3-80. First half August down three at 3-85. Club wheat 3-80. HRW 11.5 percent protein down a nickel at 5-37. Dark northern spring 14% protein down seven at 5-61. No Portland barley bids. Cash fed cattle sold $2 lower late last week and that pressured futures contracts as traders had expected at least a firm trade. Cattle also felt selling pressure from other commodity markets where speculative longs were liquidating. Aug live cattle down 178 at 78-85. Aug feeders down a dollar 108-60. July Class III milk down three cents at 11-75. I'm Bob Hoff and that's Marketline on the Northwest Ag Information Network. Now this.