Grain and livestock futures are seeing commodity wide selling pressure Monday morning. The risk off sentiment is threefold. Kent Beadle with Paradigm Futures says it is tied to demand fears with property giant China Evergrande Group being forced to liquidate by a Hong Kong court. That’s sparking concerns of a deepening crisis in China’s real estate sector.
Additionally, the Middle East conflict has escalated with a drone attack on a base in Jordan which killed three U.S. troops on Sunday. The Red Sea issues continue to increase freight costs and create shipping issues for grain exports which is also negative for demand. Finally, Brazil’s soybean crop is starting to be harvested and their basis levels are well under the United States. This sparked rumors on Friday that Brazil soybeans were being imported into the U.S.
Beadle says as a result March soybeans have taken out long term support at $12.00 and made new lows for the move and soybean meal is also making new lows. The last time soybean prices were this low was in June of 2023. March corn futures have held the contact low of $4.36 ¾ but are also susceptible to selling following soybeans and wheat. Beadle says wheat’s performance is disappointing after all three classes had higher weekly closes last week.
Cattle futures are also seeing risk off selling but also profit taking and hedge pressure after seeing 50% retracement levels scored in March feeder cattle, while April live cattle approached that level. Markets are also awaiting Wednesday’s USDA Semi-annual Cattle Inventory Report.
Lean hog futures are also seeing risk off selling tied to China demand fears and seeing some profit taking and hedge pressure after a higher week last week. April lean hogs were up $5.10 for the week last week.
