Corn and soybeans closed higher Wednesday. Wheat, cattle and hogs settled mostly lower.
Grains See Early Pressure on Government Shutdown, Report Hangover
Randy Martinson with Martinson Ag says grains started lower Wednesday as Congress could not reach an agreement to fund the federal government which triggered a shutdown at midnight.
This means only essential USDA information will be released but that does not include weekly exports and the October WASDE will also be delayed.
Martinson says this void of news could put pressure on the grains markets which don’t like uncertainty.
Corn also saw follow through selling pressure from report hangover and the additional 207 million bu. of old crop corn USDA put on ending stocks.
Soybeans Reverse on Trump’s China Post
Soybeans made new lows for the move early in the session with November falling below $10.
Prices then reversed and rallied more than 25 cents from the lows to close above Tuesday’s high and completed an upside reversal. Soybean oil futures also posted an upside reversal while bean meal erased early losses.
The recovery was in reaction to President Trump posting via Truth Social that he and Chinese President Xi Jinping will meet in four weeks and that “soybeans will be a major topic of discussion.
Soybeans ended more than 11-cents higher with hopes that China will be making purchases of U.S. soybeans in the near future.
However, Martinson warns that even if a deal was struck today the U.S. has already lost out on export business it won’t get back and the window for the U.S. to make sales with a deal by early November is nearly closed.
China Has Soybeans Needs Met
China also has purchased enough soybeans from Brazil and recently from Argentina that they may be able to get to Brazil’s next crop year without buying from the U.S.
Soybeans Battle Harvest Pressure
Soybeans will also have a difficult time staying above the $10 level as the harvest is moving rapidly across the Midwest creating farmer selling and hedge pressure on every rally.
Corn Follows Soybeans
Corn futures reversed with soybeans to close slightly higher but were still digesting the bearish Quarterly Stocks numbers.
Martinson says corn yield will need to drop 7 to ten bu. now to get under 2 billion bu. on ending stocks after the additional inventory USDA found in the report.
Corn too will have a difficult time staging a rally with the lack of USDA information and as harvest pressure ramps up.
Wheat Makes New Contract Lows
All three classes of wheat hit new contract lows early in the session with the government shutdown weighing on futures and also feeling report hangover as USDA found both higher stocks and production.
However, when corn and soybeans recovered it did pull wheat off its lows.
Martinson says the wheat market will continue to struggle with the large production from the world’s six largest export countries and as the market is pushing wheat prices low enough to be used in the feed ration.
Cattle Futures End Mostly Lower on Lower Cash
Cattle futures saw early strength on follow through technical buying and short covering as well as news FDA had approved the first drug which would provide prevention and treatment of New World Screwworm (NWS) in catte.
However, cattle ened mostly lower after corn and soybeans rallied, making feed costs higher.
Martinson says the nearby live cattle contracts also struggled with light but lower cash trade development in the North at $360 dressed, down $5 from last week.
Hogs Consolidate
Lean hog futures saw profit taking for a third session after recent contract highs.
