Soybeans and corn are slightly higher Tuesday morning with wheat struggling. Cattle are mostly higher, with hogs lower.
Soybeans Bounce Awaiting Aid Details
Mark Knight, Farmer’s Keeper Financial, says soybeans are back higher early Tuesday on light technical buying but awaiting details of the Trump administration’s farmer aid package.
Early talk is $15 billion and it will be targeted towards soybean producers who have been hurt the worst by the trade and tariff actions.
Knight says this could help with cash flows and keep some soybeans off the market as producers store and wait for better prices and basis levels.
That is especially the case in the Dakotas and Minnesota where basis levels are horrible because they normally get shipped to China off the Pacific Northwest.
“I can’t help those guys re -own bushels because there is not a basis play after you release the physical product. So those guys are kind of stuck in holding the physical as long as they can or paying storage, et cetera. So any aid that may come from the government makes analysts think that they’ll be able to hang on to their crop that much longer and you won’t get excess supply dumped on the market,” he explains.
The Trump Bump
Soybeans have seen a Trump bump from the President posting about soybean sales to China at the end of the month but the market may be getting ahead of itself, at least for this year, according to Knight.
“China has bought from Brazil and Argentina, they certainly don’t necessarily need them. But, you know, Trump can still, I suppose, make them buy them and let them figure it out from there. I mean, we buy so much other stuff from them. I think deal will happen. It’s just, is it a month from now or is it six months from now?”
Corn Tries to Follow Soybeans
Corn is seeing some spillover early Tuesday from the stronger soybean market but continues to struggle with harvest pressure and the higher dollar.
That has created a range bound market for corn says Knight.
“The market is still trying to determine the yield and that keeps us in a trading range,” he says.
No October WASDE
With the government shut down, the lack of government data, except for export inspections, is also leaving the market a bit hesitant.
Knight says at this point there is not much change of USDA releasing the October WASDE, even late.
Knight says, “They did release analyst expectations for the report that we’re most assuredly not going to get this week for sure. It came with just small small bumps lower on yield you know carry out picking up because of the quarterly stocks report we received a week ago when we had 200 million called extra bushels of corn, which really came from maybe
wrong demand numbers.”
However, he adds that the lack of a report may not be a bad thing as USDA wasn’t likely to lower yield by much, leaving the market disappointed.
When the government does reopen, Knight says there will be a USDA data dump.
Corn and Soybeans Range Bound
With the lack of news and farmers being in the middle of harvest, Knight says corn and soybeans are still trading within their sideways ranges.
“The market’s not sure what to trade right now,” he adds.
Wheat Struggles
Wheat futures are struggling once again within striking distance of contract lows as the stronger dollar and technical selling continue to pressure the market.
Knight says the market is just trying to find a price low enough to compete with global supplies and with corn and sorghum in the U.S. feed ration.
Cattle Futures Extend Gains on NWS Case
Cattle futures had a strong technical close on Monday and staged a bit of a chart breakout which is bringing some speculative buying interest into the market with feeders still the leaders.
Fundamentally Knight says boxed beef values firmed up Monday which is positive but the bigger news came from another case of New World Screwworm detected 170 miles from the U.S. border.
That is supportive as it keeps alive the idea that imports of Mexican feeders into the U.S. will be pushed off further.
President Trump talked with Brazil President Lula on Monday and there was no movement to lower the 50% additional tariffs the U.S. has placed on their goods, including beef and Knight says that is also fueling the market.
