Corn and soybeans retraced on Wednesday, with wheat steady to firm. Cattle consolidated, while hogs soared to new highs.
Soybeans and Corn Fade China Trade News
Craig Turner with StoneX says corn and soybeans faded after some early strength and a higher close on Tuesday.
He says the market was initially charged by news the U.S. and China had reached a trade framework to continue their tariff truce and allow rare earth mineral imports.
However, the deal was lacking in detail just like so many of the trade deals touted by the administration.
Turner says, “Until the market sees something more concrete that leads to actual sales, grain markets have a money flow problem.”
That’s because funds are pushing the short side of the grain market with a void of bullish demand news.
He says there isn’t much chance for any additional sales for the old crop marketing year, especially with an appeals court ruling the “Liberation Day” tariffs can stay in place until a July 31 court hearing.
Additionally, the lack of a significant weather threat is also allowing the grain markets to drift lower.
Wheat Mixed
Turner says the one exception may be hard red spring wheat as the 30 million acres planted between Canada and the U.S. are threatened by drought and other weather issues.
He is looking for a quiet WASDE report on Thursday with essentially no changes in the new crop yield or supply estimates and only a slight tightening of the old crop balance sheets.
Cattle Consolidate
Cattle futures ended mostly lower with some routine profit taking awaiting larger scale cash trade.
A few cattle traded in Texas at $235 but more traded in Kansas at $238-$240. No trades are reported in the north with sharply higher asking prices.
He admits the market got shook up with the news of ICE raids at meat facilities in Nebraska, but he thinks at the high price levels the futures market needs to see routine setbacks.
Lean Hogs Make Contract Highs
Lean hog futures were higher with contract highs hit in the back months again but Turner thinks the market is following cattle.
“I don’t see how lean hogs can help but go higher when the cattle market is into record highs,” he says.
