Overnight, grain markets are weaker across the board, although soybean oil has shown the most reluctance to trade red. The follow through selling by most contracts from Tuesday shouldn’t be too surprising considering the run we’ve seen of late. Selling could accelerate once day session volume arrives. Soybeans on China’s Dalian Exchange were up 2.33% while soybean meal was down 0.33% and corn was down 0.32%. Early Wednesday, the March DJIA futures are up 86 points.
Live cattle futures failed to the upside with April and June closing lower. The large premium of futures to cash may have an impact even if cash trades higher again this week. There is some, indicating packers will be raising bids in order to get the cattle they need, but futures may already have this factored in. Boxed beef prices being lackluster may indicate price has moved high enough to begin to slow demand. However, one or two days of lower boxed beef does not mean much overall, but it could be a signal. The World Agricultural Supply and Demand report does not indicate that feed prices will be much cheaper anytime soon and cattle need to be feed. Bitter cold weather may reduce cattle movement, but it will also impact weight gains, or should I say, the lack thereof. Business is not expected Wednesday but bids and offers might begin to show.
Hog futures showed a similar pattern as cattle with closer months unable to close in positive territory with the exception of February. The February contract only has three days remaining for trading and will remain close to cash. Cash increased quite nicely Tuesday as packers purchased hogs as much as $3.48 higher. That may be hard to top the rest of this week. But with cutouts continuing to post positive gains, it will be difficult to make a bearish case for the market. December exports to China were down about 100 million pounds from May 2020, but much of this was made up with increased exports to other countries.
Farm and Ranch Director Jesse Allen has our full report: