Corn ends higher Tuesday, with soybeans and wheat mostly lower. Cattle recover, with hogs mixed.
Corn Up a Second Day
Chip Nellinger, Blue Reef Agri-Marketing says corn was able to build on Monday’s reversal and close higher for a second day.
The corn market got oversold and was due for a technical correction and Nellinger attributes much of the bounce to fund short covering.
However, he says some of the strength may be the hangover effect of the tighter old and new crop ending stocks in the July WASDE.
“The market got so focused on weather going into the report and rains falling in key areas and so it faded the report and is coming to the realization that was a bullish report,” he explains.
Plus, the extended forecast is looking hotter and the market may be adding some weather premium.
Can Corn Continue to Recover?
Nellinger says it will be difficult to sustain a rally without a weather problem as ideas of higher yields continue to serve as a headwind.
Nellinger says, “We can probably rally December corn back near $4.30 just on short covering but to get over that level will take weather or a crop problem.”
The only production problem he is hearing about is pollination problems tied to genetics, but its spotty.
“I don’t know if it hurts yield much unless we get some heat building back in and then it could be a different story,” he says.
Soybeans Fall on Higher Crop Ratings
Soybeans saw pressure from a 4% improvement in crop ratings in the Monday’s USDA Crop Progress report, with 70% of the crop now rated good to excellent.
However, Nellinger says the market reaction could have been more bearish.
“When I saw the jump in crop conditions I thought we were going to see a big pullback overnight and into Tuesday but the market handled it better than expected,” he says.
That was likely tied to the rally in bean oil as the market was anticipating a strong NOPA crush figure which came in at a record 185.7 million bu. with bean oil stocks the lowest since 2004 at 1.37 billion pounds.
Nellinger says if bean oil can break out technically into the 60 cent level it could pull soybeans higher, but the struggle will be with soybean meal continues to hit new contract lows.
Wheat Gives Up Early Gains
Wheat futures ended lower after early strength with the dollar moving back higher and a 4% improvement in spring wheat crop conditions tied to recent rains.
However, with the U.S. winter wheat harvest past the half-way market at 63% done that should take some harvest pressure off the market and allow it to bottom soon.
Markets Eye Tariffs and Sanctions
President Trump announced a framework deal with Indonesia on Tuesday but it lacked details just like the others.
Nellinger says the market is losing confidence these deals will lead to ag sales and add on top of that the renewed tariff tiff with a long list of key trading partners.
Plus, President Trump has threatened 100% sanctions on Russian oil in 50 days without an end to the Black Sea war and that could impact fertilizer prices with Russia a huge supplier of key fertilizer components.
He says that could drive up the cost of production on corn and make it less attractive for 2026 and so its something to watch.
Cattle Recover Chasing Cash
Live and feeder cattle futures had a nice recovery on Tuesday chasing cash.
The five area weighted average steer price was up $7.78 last week to $237.21 and futures are holding a big discount.
Nellinger says that prompted the funds to step back in to buy on the break, plus the feeder cattle are still working in the tighter supplies from the closure of the Southern border to Mexican cattle imports.
“That should keep cattle futures well supported,” he states.
