Corn and soybeans are mixed early Thursday with bull spreading evident, while wheat, cattle and hogs see pressure.
Mike Minor, Professional Ag Marketing, says soybeans ended higher yesterday on easing trade tensions with China but Beijing has denied claims there are any ongoing negotiations currently with the U.S., so flip flop continues.
Corn and soybeans are both seeing forward spreading which is an indication of commercial demand and basis levels have been improving for both crops which is a good indication of underlying demand and slower farmer selling.
Weekly exports were below last week, but within trade estimates for all three legs of the grain complex.
Corn exports were at 45.4 million bu., soybeans at 10.2 million bu. and wheat at -5.3 million bu. old crop but 13.7 million bu. new crop as the transition from one marketing year to the next continues.
The corn market is trying to rebound after four days lower and corn and wheat have been anchoring each other.
The pressure in corn has been tied to fast planting pace and ideas of additional acres, while wheat has been weighed on by rain chances in the hard red winter wheat areas.
July HRW wheat scored another contract low as a result Thursday morning.
Cattle futures started mixed after new contract highs in the live cattle futures Wednesday.
However, the market quickly saw some profit taking and maybe even some hedge pressure.
Cash trade has continued to hold up the cattle and Minor says he’s been impressed with how the funds have only exited a small portion of their long position during the roughly 20% correction in the S&P.
Minor thinks as long as demand stays strong along with cash, the funds will continue to defend that long position.
Lean hog futures are seeing pressure as the market is consolidating with the futures at a premium to the cash index and reacting to poor weekly exports at only 5,600 MT, a marketing year low.
China posted cancellations of 12,000 MT, which is concerning but not surprising after the escalation of the trade war.
Minor says he’s closely watching cutout values because they need to push higher to keep the futures rally going or packers will slow kills.
Currently cash hog prices have been hot and strong domestic demand is making up some of the shortfall from the lost export business.
