Grains and livestock end mixed on Monday.
Arlan Suderman, Chief Commodities Economist for Stone X, says corn and wheat have been feeding off each other and both ended higher on value buying after wheat hit contract lows last week.
Corn continues to see strong end user demand and that’s anticipated to be confirmed in the WASDE Tuesday and Suderman says that may already priced into the corn market.
The markets also added risk premium on geopolitical concerns and questions about the production concerns with the Russian wheat crop.
Soybeans fell following lower Brazil basis levels and mostly favorable weather as Suderman says the market is gearing up for a record crop in South America.
“It could be nearly 20 million metric tons higher than last year,” he says.
Tariff talk has been a headwind for the markets, especially soybeans.
Suderman expects a trade war is brewing with China if President elect Trump makes good on his threat to increase tariffs.
However, he thinks that will be followed by a trade deal with China longer term.
Cattle rallied pricing in last week’s higher cash but are still trading at a discount as the market is apprehensive about seasonal demand softening according to Suderman.
Lean hogs were lower on hedge pressure and managed money took a break from adding to their record long position.
But he says with 2% lower production than expected by USDA the market will be well supported.
