Soybeans make new lows for the move and three year lows as funds continue to sell.
Rich Nelson of Allendale says the market is trading trend line yields with the idea that the rains in the dry areas of the Eastern Corn Belt is improving yields.
“I do think that weather is the largest contributor for us right now in the short term. Keep in mind the trade is wondering with these rains coming for the East will there be some type of offset now to the mixed performance of these crops in the Western Corn Belt,” he says.
The implosion in the soybean oil market also drug down soybeans.
But it’s not just about supply, there are also demand concerns overhanging the market with exports running behind year ago figures for old crop and new crop bookings as well.
Nelson says corn and wheat tried to bounce on corrective buying but ended off highs being pulled down by soybeans.
Funds are near to record short in the corn market but Nelson thinks December corn is approaching fair market value at $4.00 with the higher ending stocks at around 2.3 billion bushels.
Nelson says unlike beans, corn exports have been pacing well ahead of year ago figures, plus feed and ethanol demand have been strong.
The wheat market has also seen good export demand but Nelson says it has struggled to recover because yields have been running above expectations on winter wheat and traders are expecting higher production in the USDA report on Friday.
The cattle market saw early strength but reversed on profit taking and hedge pressure, plus was pulled down as boxed beef rolled over at noon with the Choice cutouts down $4.87.
Nelson says the cattle market failed for a third day and is looking toppy at this point.
“Boxed beef has been on a 45 day rally where we’ve added almost $38 per hundred weight to wholesale beef prices. We’ve gone far above what the most bullish hope could have been. So the question is the big drop of $4.87 the top?”
Lean hog futures fall with cattle and the lower Lean Hog Index.
Nelson says the pork cutouts and cash topped out earlier than the normal seasonals and have pulled the futures lower.
