Corn and wheat settle lower on Tuesday with soybeans and livestock higher.
Dan Basse, president of Ag Resource Company in Chicago, says corn was pressured by the fast planting pace of 12% nationally and a slightly more open forecast in the Eastern Corn Belt for the next week or so.
The Western Corn Belt weather also looks conducive for planting and should also fast seeding in the Dakotas which he says will lower the likelihood of prevent plant.
He says this is fueling ideas of more corn and trade talk is now buzzing about 96 million acres this spring which could put new crop ending stocks well above 2.0 billion bu.
Wheat futures fell in tandem with corn but that market was also trading weather and forecasts for some timely and beneficial precipitation in hard red winter wheat areas.
This should negate some of the poor conditions that pulled the national crop rating down 2% last week to 45% good to excellent.
Soybeans were higher after bouncing off key support levels Monday and talk of deescalation of the trade war with China by administration officials also helped create some buying interest.
Also, China continues to buy massive amounts of Brazil’s newly harvested soybean crop which is raising their basis levels and lifting U.S. values.
Still, U.S. prices are cheaper and the U.S. is picking up business from other countries with the trade embargo the Chinese have put on U.S. soybeans with their high tariffs.
Basse says that has caused him to raise his export forecast for soybeans.
Cattle futures rallied along with the huge recovery in the S&P and crude oil markets, which was tied to President Trump saying he’s not going to fire Fed Chair Jerome Powell.
Basse says the April live cattle made a new contract high and the deferred months look poised to retest the old highs as well.
He says prices have not reached a level that is high enough to ration demand yet and so that market continues to stay strong.
The higher cash trade last week and expectations for higher money again this week are also pulling up the futures.
However, Basse cautions that the markets may be forming a double top and producers should be looking at this as a hedging opportunity.
Milk futures have recovered from the April lows and are grinding higher but Basse is not overly optimistic about continued strength.
He says exports to China have been a big feature of the U.S. dairy export program and until the U.S. finds a replacement for that buying continued recovery may be difficult.
