Grain markets are trying to extend Monday’s gains on more threatening weather forecasts for the Corn Belt and concerns that will cut into crop ratings.
Kent Beadle with Paradigm Futures, says, “The next two weeks are expected to be hotter and drier in the Eastern Corn Belt and the 30 day outlook also has above normal temperatures for the month of August.”
Crop ratings for corn eroded by 1% on Monday to 67% good to excellent, while soybean ratings were unchanged at 68%.
Yet crop condition ratings have continued to slip in the West and in Northwestern states the crop is behind normal so it will be a battle to see if the Eastern Corn Belt can make up for the deficiencies in the West.
However, Beadle also thinks the rally that started Monday in the grains is tied to politics and the announcement that President Biden was not running for re-election.
He explains that especially soybeans had a negative reaction to President Trump’s assassination attempt because there were concerns about increased tariffs on China.
Wheat set back early on the higher dollar but is started to push to the plus side shortly after following the strength in corn and soybeans.
Cattle are under pressure with higher corn prices and having priced in the bullish placements in the Cattle on Feed Report.
Hogs are to the plus side pushed by a counter-seasonal rally in cash and cutouts.
However, Beadle expects a recovery to be somewhat short lived as producers use it as a hedging opportunity.
