Grains are mixed early with corn and soybeans trying to bounce, while wheat is lower. Hogs are under pressure, with cattle mixed.
Corn and soybeans saw some early short covering but have struggled at times getting drug down by wheat says Kent Beadle, Paradigm Futures.
However, corn and soybeans have been down the last six days and are very oversold and due for a corrective bounce.
Beadle says there has been renewed fund selling in the corn as open interest has gone up over 107,000 contracts during that six-day time period.
The market has been removing some weather premium with corn planting nationally now 2% ahead of the five-year average and a 75% good to excellent crop rating.
However, Beadle says that USDA data is misleading. “The five-year data includes a couple of the slowest years for planting progress including 2019 but if you look at the 25-year history the U.S. corn planting progress is actually a bit behind. We are also past the last planting date for many areas of the corn belt.”
He says when you look at the corn rating it looks high but not all of the crop has even emerged yet, and that portion of the crop has seen too much water and might drag down the overall condition.
Wheat is down for the sixth day and has seen profit taking after the big gains in May. It is also following a lower European wheat market.
Beadle says right now traders are also disregarding the extended Russian wheat forecast which looks hot and dry.
All of the grains have been down the last 5-6 days on renewed fund selling as the market seems to have worked any production concerns.
Live cattle see some short covering, with feeders lower as that market chops. Cattle saw some end of month profit taking last week with concerns about China delisting a JBS plant in Colorado but Beadle thinks much of that is worked into the market so at least live cattle futures are trying to consolidate and wait for cash direction.
Meanwhile, lean hogs make new lows for the move with stalled cash and Beadle says if these support areas are breached the market will likely test the contract lows.
