Corn, wheat and cattle all ended lower on Tuesday, while soybeans and hogs held firm.
Arlan Suderman, Chief Commodities Economist with StoneX, says wheat saw double digit losses from fund selling and weather.
“With the rains, we got over the weekend and some dry areas of the Plains that just gave more impetus to funds selling it,” he says.
The wheat market also saw pressure from the strong dollar, which served as an anchor for corn.
Suderman says although there are some areas of the Southern Corn Belt that are receiving too much rain and may have to switch acres from corn to soybeans or take prevent plant, he doesn’t think it is a large enough area for the market to be concerned.
“I hate to say this because I know it is a big deal to those farmers who their livelihoods is affected. So as we look at the possibility of one million, two million acres, that’s a big deal for that region of the Southern and Eastern Midwest. But overall, when you look at the big picture, I think the funds are saying, well, the rest of the crop is doing well and ultimately summer weather and ultimately the national average yield is going to have a bigger impact than than losing one or two million acres,” he explains.
The ag markets largely faded news that President Trump would delay the EU tariffs of 50% until July 9.
The financial markets traded with more exuberance and Suderman says its because the ag traders started ignoring trade and tariff news a few weeks ago and are more focused on grain fundamentals, like weather.
“So it’s a good sign that the European Union is now stepped up to trade, to negotiate in good faith, but how much does it impact our corn, soybeans, wheat, beef, pork, etc. Until we actually see something hard fast that’s going to increase demand, these markets have gotten tired of the headline swinging back and forth,” he says.
Soybeans ended firm with just slight reaction to the EU tariff delay but he thinks that market is being supported more by the hopes that the Renewable Fuel Standard volumes will be favorable for the industry.
OMB is meeting with biofuels groups to work out the details amid rumors of biomass based diesel only getting RVO levels of 4.65 billion gallons for 2026.
Suderman says there is talk that if EPA grants the pending SREs to refineries that they may make up the volume in the blending mandates, but the market awaits confirmation.
“So if the SREs are relatively large, then the RVOs could be even higher, and it could even be higher than 5 .25 billion expected,” he adds.
Meanwhile, Argentina has seen lower soybean production estimates due to flooding but Suderman expects a limited impact on either the corn or soybean crop. Instead he says early yields have been good and the same is true for early safrihna corn in Brazil.
Cattle futures had a wild ride, opening higher then seeing a sell-off early in the session on rumors of New World Screwworm in the U.S., which were later confirmed to be false.
It was a disappointing close according to Suderman considering the record cash trade last week, the soaring stock market and confirmation of tighter numbers in USDA’s Cattle on Feed report.
“The Cattle on Feed report showed the sixth month in a row of declining year on year numbers. And we’re seeing that play out really in our slaughter numbers. This week, we expect record low slaughter somewhere between 500 and 530,000 total for the week. And overall, we continue to see those numbers decline, especially in the Southern Plains feedlot district,”
Suderman says the tight numbers will continue to support the cash trade and if the market is higher again this week the futures board will likely retrace Tuesday’s losses.
