Corn and soybeans ended lower on Monday, with cattle futures higher.
Corn Falls on Favorable Weather
Garrett Toay, AgTraderTalk, says corn and soybeans continued to push lower and near recent lows on weather as areas of the Corn Belt saw rain over the weekend and the heat is starting to ease.
Toay says the key will be if the cool weather can linger into August because if it does that could push corn yields up to the 190 bushel mark, and if heat returns the trade may settle back into a 181 bushel yield projection.
The weather currently is superseding the strong demand picture in corn according to Toay.
Export inspections on corn Monday morning were the largest ever for this week at 59.9 million bushels and total shipments are at 2.376 billion bushels, which is 29% above last year.
How Low Will Corn Prices Fall?
December corn is closing in on the contract lows, so if weather continues favorable to push yield to the upper ends of the current projections how low do corn prices need to fall?
Toay says, “I think December corn will fall below $4 but I don’t think we will stay that low for long because of end user buying at that level,” he says.
He also doesn’t think the corn market needs to go down to the $3.60 level like it did in 2024.
Soybeans Sag on China Demand Fears
While the weather picture is currently favorable for soybeans as well, the market is sagging on concerns about slow export demand.
Export inspections for soybeans were at 15.1 million bushels but China has been absent the last 11 weeks on the old crop sales sheet and has not bought any new crop soybeans.
Toay says this is a concern, “This is kind of a cold war this time. I am not sure if China isn’t buying because of the trade situation with the U.S. or just the available supplies of South American soybeans but a well noted South American trader indicated that China had recently bought nearly 64 cargoes of Argentine soybeans.”
Argentina Lowers Export Tax
Also a negative for both the corn and soybean markets was news that the Argentina government had lowered their export taxes on corn from 12% to 9.5%, soybeans from 33% to 26% and soy products from 31% to 24.5%.
That makes the U.S. less competitive in the export market.
Cattle Gap Into New Highs
Live and feeder cattle futures both gapped higher Monday morning into contract and all-time highs on the heels of USDA’s bullish Cattle on Feed and Cattle Inventory Reports.
Toay says the on-feed number was a record low for the month of July.
However, the futures ended off session highs and Toay thought the price action in the futures was muted considering just how bullish the numbers were and with cash trade developing at steady to higher money last week.
He doesn’t necessarily think that means the highs are in but as a cattle producer himself it is something he’s going to keep a close eye on.
