A mixed day in the ag markets Tuesday.
John Heinberg, Total Farm Marketing, says soybeans saw profit taking pressure early Tuesday but clawed back to close slightly higher with the help of the soybean oil market.
Bean oil made new highs for the move with the tailwind of higher crush estimates in the May WASDE.
The House is also trying to extend 45Z through 2031 as part of the House budget reconciliation process and limit feedstocks to U.S., Canada or Mexican origin.
Soybeans were also continuing to digest the lower ending stocks in the May WASDE and the easing of China tariffs.
However, Heinberg says soybeans have continued to be resilient with the ideas of lower acreage and production this spring than USDA is forecasting.
He says the fast planting pace on corn at 62% nationally is leading to talk about additional corn acreage at the expense of soybean acres and that is holding back new crop corn, as well as forecasts for rain in the Western Corn Belt.
That may somewhat explain why corn had a poor close Monday after lower than expected ending stocks in the USDA report.
July corn made new lows for the move Tuesday and hit levels not seen for five months before bouncing.
Heinberg says the continued pressure has come from cheap wheat, the approaching May expiration date and the bigger corn crop out of Brazil with USDA raising production 4 MMT to 130 MMT.
Wheat hit new contract lows in all three classes before winter wheat bounced and closed slightly higher on the day.
So is that market trying to bottom?
Heinberg says he hopes so as early reports from the Kansas Wheat Quality Council Tour are showing heavy disease pressure which may cut yields in the top producing state.
Cattle futures eased slighly off of all-time highs to close mixed but Heinberg says the market is still in good shape with the pull from strong cash trade and Mexican border closure due to New World Screwworm.
Yet, even bull markets need to correct and the cattle market may be well overdue, so he is advising risk management.
Lean hog futures also recovered some early weakness on China hopes which is pushing deferred contracts into new highs.
However, Heinberg says the June contract failed at the $100 mark as cash continues to cool and will need to close above that level to continue higher.
