Corn futures fell to new lows overnight as poor demand from the ethanol market keeps selling pressure on the corn market. Crude continued to plummet overnight after an unprecedented devaluing of the nearby May contract on Monday, as well as follow-through weakness seen in the stock index futures, and strength in the dollar. All of this adds up to outside-market pressure for corn. In addition, USDA, on Monday afternoon reported U.S. corn planting progress at 7% nationally which is off to a respectable start. Good progress is expected for the bulk of this week, too. The technical picture is clearly lower as long liquidation and growth of the short fund position favors the bears. Dec corn reached a new contract low point of 3.33-3/4 on losses of 3-1/4 cents. July fell 5-1/4 cents to 3.17.
Soybean futures were down double digits in the nearby contracts overnight to new contract lows. July beans got to 8.25, down 11-1/4 cents. Nov was down 8-1/4 cents to 8.37-1/2 as the weakened technical picture and demand concerns keep the market in long liquidation mode. U.S. exporters continue to struggle to compete with Brazilian soybeans on the export market as the U.S. dollar and Brazilian real begin widening again. Then, weak soybean meal demand is weighing on sentiment and leading the complex with new contract lows today as livestock is in a reduced capacity or backed up thus causing decreased demand for the feed ingredient.
Wheat futures followed suit with row crops overnight, trading 3 to 5 cents lower in the winter wheat categories. Those markets gave back a large portion of Monday’s gain that were fueled by a dry forecast and potential crop concerns for Europe and the Back Sea region. A drop in U.S. wheat crop ratings due to cold temperature last week could provide additional support with the U.S. winter wheat crop at 57% good/excellent, down 5% from last week. However, a stronger dollar and pressure from outside markets is making for a ‘risk-off’ attitude among active traders this morning. July Chi wheat, at 5.44 is huddling near the contracts 10 and 100-day moving averages. July KC wheat is still in a modest uptrend and at 4.98 is above all of its key moving averages.
Live cattle futures are called mixed. Despite the strong surge in retail carcass values, the concern about cash markets and reduce slaughter numbers create caution about backing up slaughter cattle numbers as prices look for direction. Choice carcasses surged $9.38 cents higher and Select was $10.79 higher as retailer look to lock in potential tighter supplies. Technical studies continue to remain mid-range with an up-trending pattern that could reinforce price strength if resistance levels are breached.
Lean hog futures are expected to see two-sided trade early as participants digest yesterday’s price strength and potential for near-term bottoming action. Processing plant closures remain an issue regarding the handling of the large supply of slaughter-ready hogs. Retail carcass value strength does offer some of the buying support in the hog markets as carcasses finished $6.55 higher in afternoon trade.