Grain and livestock futures ended mixed Tuesday.
Soybeans saw losses of more than 20 cents with the November contract closing under the key $10 mark.
Dave Chatterton, Strategic Farm Marketing, says soybeans saw profit taking with better than expected crop ratings at 65% good to excellent, which was steady.
“Rating generally decline this time of year but are running well above historical levels for mid-September,” he says.
That reignited fears USDA may raise soybeans yields in the September WASDE.
Chatterton says early yield reports in parts of Illinois are indicating late season disease and a very dry August may have trimmed yields, but the market is looking at the data and is still anticipating a yield above 53 bushels per acre.
He thinks the lack of fresh export business to China was also a disappointment for the soybean market as sales continue to run well behind year ago levels.
“Part of that has to do with the FOB spreads and what we’ve seen is the U.S. values have come up just enough and the Brazilian values go back down just enough where that spread is only at about a $3 discount per metric ton to the U.S.'s favor. So China continues to take beans from Brazil,” he explains.
The corn ended lower on spillover from lower soybeans and crude oil but was at least able to hold $4 on the December contract with help from higher wheat.
Chatterton says corn has been a follower lately and is slopping around looking for clear direction from USDA that yield and crop is at least not getting bigger.
However, the market is also seeing weakening basis due to the low water levels on the lower Mississippi River.
He says the big carry in the corn market is indicative of those logistical issues.
The implosion of the crude oil market and 16 month lows is also a drag on the corn market and is an indication of slowing demand.
Wheat ended slightly higher on short covering by the funds and the market is still looking for a seasonal low.
After a strong recovery Monday, live cattle did not see follow through gains.
Chatterton says the market is being held back by lower cash and seasonally it is past the peak demand period.
Lean hog futures ended mixed but he thinks that market has put in a short term top with growing weights and numbers in addition to concerns about slaughter capacity.
