Corn, soybeans and hogs end higher Friday, with wheat and cattle mostly lower.
Mike Zuzulo, Global Commodity Analytics, says the strength in soybeans was tied to optimism about tariffs on China being lowered by the U.S.
President Trump suggesting that the tariffs could come down to 80% during the weekend meetings between top officials of the two countries in Geneva this weekend.
Corn followed soybeans but also saw short covering after new lows for the move were scored on Thursday.
Grains also saw some positioning ahead of the May WASDE on Monday with the first look at new crop balance sheets.
Zuzulo says USDA is taking tariffs and trade deals into account in their new crop estimates.
In that case he thinks the ending stocks estimate a 375 million bu. for soybeans may be too high.
He agrees with the 2.0 billion bu. estimate on corn especially with the new trade deals coming down the road including the UK and India.
The old crop corn estimates peg ending stocks at around 1.44 billion bushels.
But is this too low with the pressure the July contract and the July/Dec corn spreads have seen this week?
Managed money traders have been exiting long July corn positions as they see much larger supplies ahead for 2025-26 with ending stocks pushing over 2.0 billion bu.
Zuzulo thinks the trade may have it wrong.
“Corn demand has been strong and exports are still running nearly 27% ahead of a year ago and we have essentially no weather premium in the new crop contract either,” he says.
Wheat ended lower with both classes of winter wheat making new contract lows.
He says the pressure is coming from improved weather and growing conditions in the U.S. and key global production areas.
After some early strength and more new contact highs, the live and feeder cattle futures ended mostly lower.
This came on the heels of record cash trade again this week and the futures are still holding a discount to that cash.
Zuzulo says it looks like a healthy correction especially heading into the weekend.
However, he’s watching the feeder cattle cash index because if it starts to drop that may be the first indication of a top.
“That is what happened in the last bull cycle, the feeders led the fats down,” he says.
Lean hog futures ended mostly higher with some short covering heading into this weekend’s trade talks with China.
Zuzulo says progress will be a key for the hog market to have any chance of recovering.
