Corn and soybeans end higher Tuesday, with wheat setting back. Cattle reverse to end lower, hogs mixed.
Don Roose, U.S. Commodities, says corn and soybeans finally bounced Tuesday after closing lower for several days. He says both markets got down to price levels where selling was finally exhausted.
Funds have been selling corn and bear speading with South American export competition weighing on the July contract. As a result, corn futures made new lows for the move and for 2025 early Tuesday before recovering and possibly forming a reversal.
“Corn has lost 30 cents and farmers are not interested in selling down at those levels,” he says.
He says the markets were also adding back some risk premium with the longer term forecasts looking hot and dry for the last two weeks of June.
“Often as you hit the middle of June to the 1st of July just after 4th of July you can get some weather pattern changes. And I think, you know, we do have this high pressure system out to the far west that I think we’re watching pretty close.”
Plus he thinks the oat market is providing some clues.
“Oats has rallied 50-cents in about two weeks as the market is concerned about weather with dryness in the Canadian Prairies and that may be a signal of what is yet to come. Remember oats knows,” he says.
Soybeans also got a bit of buying interest on hopes for some progress on U.S. China negotiations as President Trump and President Xi are planning to meet this week.
Wheat futures set back on winter wheat harvest pressure, plus the dollar index was higher.
Spring wheat lost 9 1/4 cents on the July contract on profit taking tied to the improvement in spring wheat conditions. Monday USDA reported ratings at 50% good to excellent, up 5% from last week.
Cattle futures opened higher but ended lower in a day that saw bearish technical action.
The live cattle futures went up to within cents of the old contract highs and then reversed, which left a bearish outside day lower on the charts.
The selling may have been tied to unconfirmed rumors of a plant closure. It’s not the first time that talk has circulated but he says the packers have been cutting kills for weeks now to prop up their negative margins.
Roose says there was already a disconnect between the cash and the futures with the cash holding a substantial premium and the lower day Tuesday only widened the basis.
Still, demand has been strong and Choice boxed beef values are hovering around $366.
Seasonally, Roose says the cash market tops during this time period and so its reasonable to expect the futures have topped as well.
Lean hog futures ended mixed with bear spreading, so the nearby contracts were lower.
Roose says the futures are at a premium to the Lean Hog Index and even though the cash has been rising the market is waiting for the cash to catch up.
