Grain and Livestock Higher Tuesday: Where Did the Risk On Buying Come From?

Grain and livestock markets all trade higher on Tuesday.

Tommy Grisafi, Nesvick Trading, says grain futures saw risk on buying as traders were adding weather premium.

Forecasts for heavy rains and flooding in the Southeastern corn belt may cause planting delays in that area and put into question the ability to plant 95.3 million acres of corn.

Dry conditions are also developing in Southern Brazil’s second crop corn production areas.

Corn, soybeans and soybean oil were supported by positive biofuels policy news.

USDA announced a $537 million package to support biofuels infrastructure such as E15 pumps on Monday while in Iowa.

Plus, there was hope of expanded biofuels blending mandates after a meeting between EPA and oil and renewable fuels groups.

The two sides have been meeting to work out a deal to increase the Renewable Volume Obligations for biofuels in the Renewable Fuels Standard.

The coalition is pushing for blending mandates for biomass based diesel in the range of 5.5 billion to 5.7 billion gallons, with some wanting higher volumes in 2026 and others pushing for a more gradual rise.

That’s up from the current 3.53 billion gallons.

Wheat futures built on the higher closes Monday with lower acreage still being digested and fund short covering.

So, can the grain markets extend gains with 20% reciprocal tariffs hitting Wednesday?

Grisafi says the uncertainty could lead to a volatile trading session and the markets have never dealt with these kinds of tariffs, so predicting the reaction is difficult.

However, gold made record highs again on Tuesday and then reversed to end lower also tied to the tariff uncertainty.

Live and feeder cattle futures also saw risk on buying and rebounded after seeing end of quarter profit taking to start the week.

The rebound followed a rebound in the financial markets, plus sharply higher boxed beef values with Choice cutouts up $7.60.

Technical buying was also noted as managed money traders seem to jump back in on every dip.

As a result, the cattle market is closing in on contract highs once again.