Grain and livestock futures closed lower on Monday, with the exception of corn.
Why Did Corn Bounce By Itself?
Mike Zuzulo, Global Commodity Analytics, says old and new crop corn hit fresh contract lows again Sunday night initially reacting to the news President Trump was proposing tariffs of 30% on the EU and Mexico on Aug. 1.
However, by morning the market had shook it off to stage a technical bounce Monday and a key reversal in the December contract.
He says it was fund short covering and spread unwinding with wheat and soybeans. July contracts also expired which helped pull the deferred contracts up.
However, a few fundamentals popped the market including a renewed realization of the tighter balance sheets USDA provided in the July WASDE with new crop ending stocks down to 1.66 billion bu.
Also, Zuzulo says AgRural estimated the Brazilian safrihna corn harvest is running at 40% well behind last year’s 74%, as the country is facing logistical issues with the record amount of soybeans being exported to China.
Export inspections were at 50.7 million bu and total pace at 2.276 billion bu. is up 30% from last year.
Soybeans Hit 3 Month Lows
Soybeans tried to bounce overnight but hit three month lows during the session on trade and tariff concerns.
As well Zuzulo thinks soybeans were trading the hangover of the July WASDE as USDA cut exports by 70 million bu. in response to the lack of progress on tariffs and trade with China. The report also confirmed larger global stocks at 126 MMT.
China also imported a record 12.26 MMT of soybeans in June and nearly all were from Brazil.
He says the fund traders are now short over 6,000 contracts and may continue to push the short side of the market unless the forecast turns dry in August.
New contract lows in soybean meal again on Monday also pressured the soybeans and disappointing export inspections at 5.4 million bu.
Wheat Reacts to Russian Sanction News
Over the weekend President Trump signaled sanctions on Russian oil and any customer buying their oil and Congress stepped in with support.
However, on Monday the president delayed that action triggering a selloff in crude oil and in turn the wheat market as Zuzulo says it was anticipated ag sanctions would be included.
However, the wheat market was still digesting some of the bearish production numbers in the WASDE.
Cattle Correct But Was It Just Routine Profit Taking?
Live and feeder cattle futures saw a sizable correction Monday after hitting new all time highs on Friday.
The market was overbought after climbing over $8 in live cattle and $16 in feeder cattle.
However, Zuzulo also points to the increase in beef production for 2025 in the WASDE with USDA forecasting higher weights and tonnage in the second half of 2026.
“They surprisingly raised production by 540 million pounds and that was a shocker to me especially with the border closed to Mexican imports,” he explains.
He pointed out that with the high price levels in the futures a larger correction would be warranted and “healthy”.
Lean Hog Futures See Fund Liquidation
Lean hog futures were lower on trade and tariff uncertainty.
Even though Mexican ag products are USMCA compliant and are exempt from the 30% tariffs, Zuzulo thinks the action still made the market nervous.
Plus, cash trade was down sharply on Friday and softer again on Monday.
He says the seasonal highs are in and there could be more downside risk with the funds starting to shed some of their record long length in hogs.
