Grains markets all closed lower on Friday. Cattle futures hit more record highs, while hogs saw pressure.
Corn Market Trades Weather, Ignores Lower Ending Stocks
Dave Chatterton, with Strategic Farm Marketing, says old and new crop corn both made new contract lows as the market faded the friendly ending stocks numbers in the July WASDE.
He says the market was looking ahead with ideas of higher yields in future reports.
USDA rarely changes yield in the July report and left yield at 181 bu. but worked in lower harvested acreage from the Acreage Report resulting in a 115 million bu. drop in production to 15.705 billion bu.
The agency also lowered old crop ending stocks by 25 million bu. to 1.3 billion and new crop by 90 million bu. to 1.66 billion bu.
However, Chatterton says with ideal weather, including rains in dry areas of Northern Illinois this week, the market was releasing estimates as high as 190 bu.
How Low Will Corn Fall to Price in Higher Yields?
Chatterton says while December corn made a new contract low at $4.11 1/2 this week, the 2024 lows were down at $3.85, which is another 25 cents lower.
“Funds are short nearly 200,000 contracts but that’s only about half of the size of the position they held last year. So there could be more downside,” he says.
Soybean Balance Sheets Loosen, Sub-$10 Possible
USDA again left yield at 52.5 bu. but with lower harvested acres, production tightened by 5 million bu.
The agency lowered exports 70 million bu. but offset that by a 50 million bu. increase in crush tied to favorable biofuels policy like 45Z.
The net result was a 15 million bu. increase in new crop carryout to 310 million bu.
However, Chatterton says sub-$10 soybeans are likely because crush can’t make up for the possibility of lower exports, especially if the tariff tiff continues with China into harvest.
So far China has not purchased any U.S. soybeans for the 2025-26 marketing year.
Tariff Fears Also Tank Grains Markets
It was a week dominated by tariff headlines as President Trump sent letters outlining tariff increases for 20 plus countries, this included Japan and South Korea which face 25% additional levies.
President Trump is also proposing 50% tariffs on Brazil on Aug. 1 which were met by retaliation, as well as 35% tariffs on Canada’s non-USMCA compliant products.
This served to rattle the grain markets and cause uncertainty which triggered more selling by fund traders.
Cattle Futures Make Record Highs on Surging Cash
Live and feeder cattle futures soared on Friday on higher cash trade development and nearby live cattle negated bearish key reversals posted on Thursday.
Light cash volume developed in the North at $238-$240 live, dressed at $380, $10 higher than last week’s weighted average in Nebraska. Southern live deals ranged from $228 to $230, $4 to $6 higher.
Lean Hogs Back Lower Following Cash and Cutouts
Lean hog futures were lower following a collapse in the cash market at noon on Friday with the National Negotiated Direct Market hogs down over $7.
Cutouts were also down $1.68 which added to the pressure.
