Corn and soybeans set back Tuesday, with wheat higher and livestock mixed.
Kent Beadle with Paradigm Futures says corn and soybeans are seeing profit taking and farmer selling early.
This comes after both markets hit chart resistance on Monday at previous highs and retreated.
Dry weather in Argentina and Southern Brazil drove the rally early Monday but some chances for rain have also crept back into the forecast.
Row crop futures are also experiencing some caution ahead of the USDA reports on Friday.
While traders are expecting to see increased corn demand and lower ending stocks, that is not a given in the soybean or wheat market.
Plus, the trade will be closely watching the South American production numbers.
The Commitment of Traders Report showed funds had increased their net long position in corn to over 228,000 contracts so Beadle says the market should be well supported on breaks.
Wheat futures are higher with follow through buying after a higher day Monday on fund short covering.
Monday the weakness in the U.S. dollar was also a big factor according to Beadle, but with the dollar back higher Tuesday that trimmed early gains.
While winter wheat conditions dropped sharply in many states he thinks its too early to be concerned about that especially with the crop in dormancy.
Cattle futures were mixed early with live cattle seeing some profit taking and hedge pressure after a push to contract highs.
The push was in response to record cash trade with the 5-area weighted average steer price coming in at an all time high of $198.93.
However, the market continues to be bought on the breaks says Beadle due to the discount the futures hold to cash, plus the leadership in the feeders.
Feeder cattle futures continue to see a push from the sharply higher cash index and with the border still closed to Mexican feeders.
Lean hog futures are back lower early on continued liquidation on the back of lower cash and cutouts.
Beadle sees the market dropping another $5 to $7 before finding major support.
