Grains mixed to lower early Wednesday. Cattle are down sharply, with hogs following.
Corn Awaiting Yield Results
DuWayne Bosse of Bolt Marketing says corn tried to extend gains from Tuesday’s rally working in lower yield ideas.
However, it is failing at technical resistance around $4.30 on the December where farmer selling also picks up.
Harvest reports are coming in with many corn yields below 2024 due to disease pressure and late season dryness in the East and South.
That has the market anticipating additional yield cuts by USDA in October and future reports.
Bosse thinks the yield may end up sub-180, which could pull ending stocks down to 1.8 billion bu.
Soybeans Awaiting China Deal Confirmation
Soybean yield results have been more mixed but the rally this week has been more about the possibility of a China deal being completed that would include soybeans.
President Trump says a deal has been made on TikTok and he is expected to talk to President Xi on Friday.
The South China Morning Post confirmed that a deal is getting close to completion which would be a big shot in the arm for the soybean market.
However, the timing is still in question because if the deal isn’t signed until late October when the two presidents meet in person it could delay the U.S. soybean export window.
Whether or not that shift would mean less U.S. soybeans could be shipped to China is in question.
Wheat Futures Drift Lower
Wheat futures saw a strong day on Tuesday with Chicago and Kansas City closing above the 20-day moving averages, with help from a lower dollar.
However, the dollar is higher on Wednesday morning, which has curbed follow through buying.
Still, Bosse says the lower dollar has been supporting export demand and Russia has also announced a threefold increase in their export tax which should make the U.S. even more competitive.
Market Awaits FOMC Decision
The FOMC meeting wraps up today and the market is expecting a 25 basis point drop in interest rates. Some of that is already programmed into the market.
However, Bosse says that could be positive for the grain markets if it keeps the dollar in check with other world currencies and makes U.S. grain more competitive.
Whether or not it leads to more fund buying in grains is yet to be seen.
Cattle Collapse
Cattle futures were unable to extend Monday’s rally with a sell off late in the day on Tuesday.
Wednesday cattle are seeing more pressure and fund long liquidation.
Boxed beef values were also lower on Tuesday by nearly $6 on the Choice cutuouts, now at $392.62. Plus, cash trade was lower last week and anticipated to be weaker again this week.
Bosse says that is pressure the market and could cause further fund liquidation.
Lean Hog Futures Consolidate
Lean hog futures ended mostly lower on Tuesday and scored key reversals in the October and February contracts after making new contract highs.
Follow through selling and fund long liquidation is evident on Wednesday as well as spillover selling from the lower cattle market.
