Grains are quietly mixed early Tuesday, with livestock higher.
Corn Drifts Tuesday
Randy Martinson with Martinson Ag says corn is drifting Tuesday with some consolidation after hitting chart resistance on Monday.
The market has digested the lower corn yield estimates from the Pro Farmer Tour and is now marking time until harvest he says.
In the mean time this is end of the month and Friday is first notice day which will also create some selling pressure on the corn and other grain markets as producers roll out of the September contracts or have to execute or roll basis fixed or deferred price contracts.
He doesn’t think the selling pressure will be as bad as it was a year ago, but will still weigh on the market.
Soybean Basis Crashes on Lack of China Business
Soybean futures are slightly lower after a slight pop in the overnight trade on word U.S. and Chinese officials are meeting.
However, Martinson says while negotiations continue the bigger story is that basis has crashed in the Northwest Corn Belt on the lack of China demand.
China has not bought any new crop soybeans from the U.S. and China buyers have been instructed not to buy American soybeans.
Meanwhile, China is reportedly booked for soybeans through December primarily from South America.
Martinson says as a result basis levels in North Dakota on soybeans are running from $1.20 to $1.50 under the board.
“Most of our soybeans go to China through the Pacific Northwest and so we are more heavily dependent on than market than the rest of the Corn Belt,” he explains.
Wheat Struggles to Bounce
Soft red winter wheat is trying to bounce on Tuesday with some light short covering and hard red winter wheat is trying to follow.
However, the wheat market has not been able to get any post harvest traction despite strong export demand.
Export inspections on Monday were nearly 35 million bu. which should be supportive.
However, Martinson says there is just too much cheap wheat in the world and it is dragging prices in the U.S. down.
He says there are also quality issues in the spring wheat crop in North Dakota which as causing discounts on the prices.
Cattle Recover After NWS Selloff
Cattle futures are trying to recover on Tuesday after ending well off early session lows on Monday.
The market saw a gap lower opening on Monday morning with news of a human case of New World screwworm and the negative placements number in the Cattle on Feed Report.
However, the market recovered to close well off lows and the nearby contracts were even a bit higher.
Futures are still driven by tight supplies, strong boxed beef values and a strong cash market for fed and feeder cattle.
The 5-area weighted average steer price last week hit another new record at $244.25.
