Grains and hogs plunged on Monday, while cattle soared.
Rich Nelson with Allendale, Inc. says grain markets saw pressure from combination of factors.
Weather looks open for planting this week and expectations are for fast planting pace to continue for corn and soybeans which could mean additional acres.
Nelson says the seasonals also point lower for grains for another week and so that is also a factor that has been causing selling pressure and unwinding of bull spreads in corn.
July corn was down nearly $.15 again on Monday hitting new lows for the move as a result and needs to hold the psychological 4.50 area but if that is breached there isn’t much chart support according to Nelson.
Soybean futures were also lower with corn and wheat and July broke some technical support but didn’t do the amount of technical damage the corn market did.
Wheat futures hit more new contract lows in hard red winter and soft red winter wheat contracts as more rain is forecast for the dry areas of the Southern Plains.
The grain markets are also gearing up for the May WASDE and bigger new crop balance sheets.
Nelson says USDA is unlikely to factor tariffs into their estimates and during the last trade war waited until exports trailed off in reaction before they adjusted exports and ending stocks.
Cattle futures hit contract highs in live and feeder markets....again.
Live cattle continue to be pushed by record cash with the 5-area weighted average hitting a new high of $2
Boxed beef cutout values were higher at noon with the Choice category at $345.79, up $2.89.
These are levels not seen in two years and indicate strong consumer demand.
Packers have been slowing kills to prop up their margins with another 559,000 head weekly slaughter last week, which is 10% lower than last year.
Nelson says all of these factors continue to point towards a strong market with no sign of a top.
Lean hog futures corrected lower on profit taking, the futures premium to the lean hog index and the slow response of cash markets.
The market is also uncertain about trade and exports.
