Corn and soybeans try to bounce early Tuesday, with wheat lower. Cattle extend gains, with hogs mixed.
DuWayne Bosse, Bolt Marketing, says soybeans are higher with news President Donald Trump is “likely” to speak with Chinese President Xi Jinping this week, plus reports the U.S. has extended the tariffs until August 31 to allow time for negotiation.
Soybeans took out key moving average support areas, including the 50-day, and are trying to recover, while corn made new lows for the move and took out the May lows overnight before bouncing.
The initial crop condition rating on soybeans shows the crop rated 67% good/excellent versus 68% expected which may be providing some support. However, planting is ahead at 84% and emergence is at 63% compared to 57% normally.
Corn is trying to follow the strength in soybeans early Tuesday but has been under pressure the last seven sessions on mostly favorable weather.
Bosse says, “When the traders look at the forecast for the next 10 days to two weeks and it looks generally favorable the path of least resistance is lower,” he says.
Bulls continue to argue there are 7.1 million acres of corn left to plant and some trouble spots in the Southern and Eastern Corn Belt that are too wet, but the national planting pace at 93% is still normal he says. Crop ratings improved 1% to 69% good to excellent versus 75% last year.
The bear spreads continue to pressure the July corn which may be a result of more corn than USDA has projected in storage and it doesn’t help that the Brazilian corn crop continues to be ratcheted up, with the latest projections as high as 139 MMT.
Wheat futures are retreating Tuesday on profit taking in response to improved crop ratings.
The spring wheat crop is rated 50% good to excellent, an improvement of 5% from last week and the winter wheat rating was also up 2%. Winter wheat harvest is at 3%, in line with average.
Bosse says the crop needs some heat and the weather last week helped improve the crop and will continue to in the week ahead.
Cattle futures are extending gains from Monday and continue to be pulled up by record cash with the USDA reporting the 5-area weighted average steer price at $229.94, up another $2.97.
Cattle futures are at a big discount to the cash, but funds have been reluctant to push the board too much higher at these lofty levels he says.
Lean hog futures are mixed with nearby contracts seeing pressure due to bear spreading.
That’s a result of the futures getting too far ahead of the LHI and some profit taking as the nearby contracts have run into chart resistance.
