Corn and soybean futures are lower early Tuesday, with wheat trying to bounce. Cattle are lower, with hogs 2-sided.
Corn and Soybeans Breaking Down Technically
Mike Minor, Professional Ag Marketing, says corn and soybeans continue to see fund selling and broke below key moving averages Tuesday morning.
December corn is trading below the 20-day moving average with November soybeans below both the 100 and 100-day moving averages.
Minor says both markets failed at resistance levels right under chart gap areas on Friday and have been consolidating since then with technical momentum now turning bearish.
Crop Ratings Historically High
Crop ratings for corn came in at 74% nationally, which is steady with last week but up from 67% last year and historically high.
This is weighing on futures early Tuesday says Minor as the market already traded this week’s heat and crop stress last week.
The corn market is also discounting the pollination problems because they are scattered so far.
Soybeans Drift With Lack of Bullish Trade News
Soybeans crop ratings did fall by 2% to 68% nationally, which is at par with a year ago and August is the month soybean yield is made, so weather is not a factor yet.
The market is seeing pressure from the lack of bullish trade news regarding China and their lack of new crop soybean purchases according to Minor.
Wheat Tries to Bounce
Wheat futures are trying to bounce but started higher on Monday only to erase those gains on spillover pressure from lower corn and soybeans.
With winter wheat harvest now at 73% the market should be starting to bottom but has faced too much competition from cheap Russia wheat in the global market place.
Spring wheat conditions did drop by 2% this last week and are now at 52%, which is well under last year’s 77%, so that may be providing some support.
Cattle Futures Take a Break
After record highs in live and feeder cattle futures the market is seeing some profit taking pressure.
However, Minor says those breaks have been bought by fund traders who still look at strong fundamentals, including tight supplies, strong cash and strong consumer demand.
Feeder cattle continue to be supported by the closure of the Southern border to Mexican imports and Minor says if the ban stays in place through the end of the year it will result in nearly 1 million fewer cattle or 3.2% of the total U.S. supply.
Can Lean Hogs Break Chart Resistance?
Lean hog futures are struggling to get through chart resistance areas especially with the weakness in the cattle futures and with Mexico’s president hinting that they may retaliate against the U.S. for the suspension of the Mexican tomato agreement.
Cutouts have been strong with the BLT season starting and bellies moving higher seasonally. The Lean Hog Index has also started to climb.
However, Minor says that may not be enough to get through chart resistance areas.
