Grain and livestock end mixed on Tuesday.
Rich Nelson of Allendale, Inc. says funds returned to sell in corn and soybeans on weak technicals, weather and crop ratings.
Weather is less-threatening with hot temperatures lasting only a few days and more rain chances in part of the Corn Belt.
However, he says USDA’s crop ratings are also suggesting above trendline yields for corn and soybeans.
Ratings High Historically for Corn and Soybeans
U.S. corn was rated 74% good to excellent on Monday which is well above last year’s 67% and the highest since 2016 and Nelson says that implies the market is trading a 186 bu. yield.
Soybean conditions fell 2% to 68% good to excellent but he points out those are at par with last year and still historically high, also implying 52.5 bu. or better on yield.
Corn and Soybeans Take Out Support
Both new crop corn and soybeans have failed to fill chart gap areas on the charts and are now trading below key moving averages.
Dec corn is below the 20-day moving average and November soybeans are below the 100 and 200-day moving average which may keep the funds actively selling without a change in the weather forecast.
China Meeting Supportive for Soybeans
Soybeans may find some fundamental support, according to Nelson, from word that President Trump and China’s president Xi will be meeting soon, instead of waiting until this fall.
The hope is they two partners can get something negotiated before harvest or the U.S. could lose out on its key export window and Nelson says Brazil soybean prices are currently below the U.S.
Wheat Futures Bounce
Wheat futures saw a short covering bounce with some help from news Russia’s production and export forecasts were being lowered.
However, Nelson says its too early to say the low is in.
He’s been frustrated that crop ratings on spring wheat have been falling and are only at 52% good to excellent compared to 77% a year ago and yet USDA has strong production and yield expectations for the crop.
Live Cattle Consolidate, Feeders Make New Highs
Live cattle futures consolidated and took a break after all-time highs to start the week.
The market may be positioning ahead of USDA’s Cattle on Feed and inventory reports on Friday.
Cash was slightly higher last week and with the discount of the futures the market is well supported.
Feeders continued to make all-time highs again on Tuesday with strong cash in the country and tight supplies.
Lean Hogs End Mixed
Lean hog futures ended mixed unable to take out over head resistance areas on the charts, and despite soem stronger cash and cutout values.
The market has been resilient says Nelson regarding trade and tariff news, able to brush off some of the bearish developments with key trading partners like Japan and South Korea and even Mexico.
