Grain and cattle markets end lower on Wednesday with hogs finally bouncing.
Mark Schultz, Northstar Commodity, says grains saw pressure on the continued on again off again news regarding tariffs.
President Trump says the 25% tariffs will be put on Canada and Mexico on April 2, another delay on the start date.
At the same time the administration announced 25% tariffs on the European Union.
The market was also gearing up for the USDA Ag Outlook Forum to start on Thursday morning.
Schultz says the market is anticipating a shift in acreage with more corn and less soybeans.
The average trade guess is around 93.5 million acres on corn and 84.5 million acres on soybeans but he thinks the corn number is ultimately closer to 95 million on corn which is bearish.
Plus, it will take a sub 83 million acre figure on soybean to be friendly without a crop problem in South America.
Schultz says the market is seeing pressure from more favorable South American weather as dry areas of Argentina and Southern Brazil have received rains that will stabilize the crop.
However, he warns that heavy rain is also a possibility in Argentina and if they receive several inches it could also be negative for the crop.
Conversely, areas of Brazil that have been too wet have dried out allowing safrihna corn planting to catch up in most areas.
Schultz says the end of the month and first notice day on March contracts Friday has also created liquidation and hedge selling across the grain complex.
Corn and soybeans held key moving averages with the selloff this week and these areas need to hold.
Cattle broke the three day streak of higher prices with a correction on the lack of cash trade.
The market may have also been gearing up for tariffs on imports of Mexican cattle only to be disappointed with the delay.
Lean hog futures staged a relief or corrective rally with tariffs on Mexico being delayed again as this is the top customer for U.S. pork and the tariffs will likely spur retaliation directed at the pork sector.
The funds are heavily long in cattle and hogs and Schultz says he is concerned about liquidation at any time and advises producers get some hedge protection in place.
