The corn market opened higher today, following a surging crude oil market and a weaker US$ but then succumbed to selling pressure on the news that Tyson Foods would be reducing its hog herd by 28%. The Tyson news would dramatically curtail their corn usage and likely won't be the last of such announcements. Overall crop growing weather is good with no significant heat forecast for the corn belt and generally ample moisture available. Overall ideas of good crop conditions are overshadowing the areas of the belt that have had late development and need an extended growing season to catch up. On the export front, business seems to continue and we could see USDA increase the export forecast in the next report, helping to cut in to the significant carryout.
Much like corn, soybeans turned lower after the Tyson news with fund selling contributing to a $.14 loss on the close. There were several rumors today that China was going to auction off some of the soybean stocks they have been building but no confirmation. What was confirmed today was another 115,000 ton sale of old crop beans to China for August shipment. It doesn't seem to make sense that they would buy beans only to put out an auction to buy excess stocks. At this point if China continues to be in the market for U.S. beans we will likely see another increase in the old crop bean export estimate, leading to interesting ramifications for the tight old crop stocks situation. So far the continued sales have not been able to offset the bearish new crop situation with thoughts of good crop potential and increased acres for South America this fall.
Phil
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