Grain and livestock futures are mostly lower early Tuesday.
Tomm Pfitzenmaier, Summit Commodity Brokerage, says soybeans are seeing some profit taking after the rally Monday and after running into chart resistance in the July contract around $10.75 Monday night.
Planting pace on soybeans is ahead of average at 48% done and that is also weighing on futures.
Soybeans got a positive infusion of news from the easing of tariffs with China and lower ending stocks in the USDA report.
While soybeans had a bit of a chart breakout, he thinks that market needs more proof of progress with China on a deal before it can take out the next level of chart resistance.
Corn had a disappointing close on Monday after a positive WASDE with bear spreading weighing on the July contract.
And Tuesday morning July corn made new lows for the move as bear spreading continues.
Pftizenmaier says the pressure is coming from new contract lows in wheat, pushing wheat into the wheat ration.
USDA also raised Brazil corn production 4MMT, to 130 MMT, leaving end users comfortable about supplies.
Plus he thinks there was some disappointment the agency didn’t raise old crop exports more than 50 million bu.
The new crop corn was only up slightly Monday and is lower on Tuesday with the fast planting pace at 62% nationally reinforcing ideas of a record crop.
Wheat is hitting new contract lows on all three classes again early Tuesday with the better than expected winter wheat conditions at 54% good to excellent, up 3% from the previous week.
Funds are near record short in the three classes combined and they continue to sell.
“We may have to go sub-$5 yet and test the long term support area of $4.80 on HRW futures,” he says.
Live and feeder cattle futures saw some pressure early Tuesday after record highs again on Monday.
However, he says the breaks have been shallow and well supported so he isn’t ruling out buying on the break.
Mexico is asking for just a 15-day closure of the border to cattle to get into compliance with the New World Screwworm protocol and according to Pfitzenmaier that may be weighing on the feeder futures.
Meanwhile, record cash last week for a 4th week at $224.80 is supporting any break in the live cattle futures as they are still at a discount to cash.
