Grain and livestock ended mixed on Tuesday.
Corn Ends Slightly Higher on Report Positioning
Corn was up around two cents on the day. Chuck Shelby with Risk Management Commodities, says some of the support came from average trade estimates for USDA’s crop production report which came in at 184 bushels per acre, which is down 2.7 bushels from September. “The crop is still a very big crop. You know, there are some states and some areas around the country that had some great yields. But there’s also, you know, some of the disease and some of the other problems, dry weather here in the East, as we had the last six or seven weeks going into harvest. So overall, you know, the trades looking for a smaller number.”
State Corn Yield Record to Fall
In the September report USDA still had states like Iowa, Illinois and Indiana showing record average corn yields in 2025 and so Shelby thinks that is at least off the table. He says basis levels are improving on corn in the Eastern Corn Belt as the harvest winds down which would indicate lower corn production. “The question is, you know, where does that average out? But I think overall yields coming down and maybe even closer to 181, 182,” he explains. The positive note is demand has been good he adds.
Corn Ending Stocks Still Above 2.0 Billion
Corn ending stocks estimates are still over 2.1 billion bushels even with the projected yield cut but can the market eventually see yields fall far enough to drop carryout below 2.0 billion with the strong demand? Shelby says, “I think that’s a wild card, or that would be the positive to the market if we could bring the carryout down under two billion.”
Corn Rangebound
Corn has been trading in about a 15 cent range in both the December and March contracts. Shelby says it will take a significant shot of positive news to break above the 200-day moving average resistance areas of the charts. But if that were to happen he thinks the March contract could get to $4.50 to $4.75. At that point he would recommend more sales.
Soybeans Consolidate Waiting for News
The soybean market ended slightly lower but off session lows in what looks like an effort to mark time waiting for bullish news from the WASDE or China buys. “You know when you look at the bean yield, it’s very important when you look at the lower acres of planted beans , you take the yield down a bushel. It certainly has an impact.”
No China Sales, While COFCO Strikes Agreement with Brazil Firms
He says the market is also holding China premium awaiting confirmation of business from the 12 MMT commitments. “We’re above $11. That’s that’s another positive. Technically when you look at this market we trade maybe between a range of $11 and $12 potentially.” This comes as COFCO signed an agreement with a number of Brazilian firms to supply 20 MMT of soybeans and product, throwing into question the need for U.S. soybeans.
Shelby says, “Maybe the Chinese are looking at the potential what the Supreme Court might say, you know, whether that lasts two months before we get a decision or not. But if you’re the Chinese and the Supreme Court says the aren’t legitimate and Trump can’t really do that. So potentially the Chinese have made a deal, but they’re just going to take a wait and see attitude.” However, he points out when you look at the amount of beans that the Chinese have bought from South America, anything they would buy from us going forward would be a positive.
Report Accuracy in Question
However, Shelby is questioning the accuracy of the report because of the lack of USDA employees to assemble the data. “So yeah a lot of important news coming Friday. We just have to question, you know, the accuracy of it. I work with some producers who are in the, you know, survey this year and, some of them just got that in the mail yesterday. So obviously USDA sent it out, but they don’t have time to get that back. So, you know, in my mind, uh, I somewhat have questions. I’m sure they got some of that information back, but is it wide ranging enough, that that’s a question I have in the back of my mind,” he explains.
Wheat Market Rally Slowing?
Wheat futures ended higher with help from corn and a slightly lower dollar. The market has been seeing technical buying and fund short covering but is the market ready to take the next leg higher or running out of steam?
“Without the USDA, we really don’t know where the funds are positioned. I think though when you look at the prices of corn, beans and wheat, these are historically low prices when you take inflation into account. If you were a fund and, you know, we’ve seen these big dramatic drop in grain prices, you know, how much more meat on the bone is there for a fund to be selling these commodities at these prices, with the potential for going forward with some Chinese purchases.”
Cattle Turning Back to Fundamentals
Live cattle ended lower with feeder cattle extending Monday’s limit up gains. So is the market starting to turn back to fundamentals and ready to bottom?
Shelby says, “It’s one of those news driven crazy headlines story every day. And I think it showed. You know the impact of the fund money that was, you know, in the cattle markets. I think at this point, though, it goes back to the cash price. They’ve droped from $248 to $250 down to $228 to $230. I think that’s where the futures market’s going to trade and kind of stabilize here. And we go back to the basic fundamentals.”
The feeder cattle market a little bit different he says. “Feeder cattle markets still extremely strong. You got a November contract that goes up towards the end of the month here. So I think the feeders probably have a better case here.”
Hogs Bottoming?
Hog futures extended Monday’s gains and look like they may be trying to bottom. Shelby says if cattle can stabilize that will help the hog market. “I look for some increased cash prices as I think we’ve got some good demand for the Christmas holiday coming.”
