What a ride down that was today! July corn closed down its 40-cent daily limit Thursday, a show of how nervous the market is getting at these higher price levels. Grains had many of the largest percentage losses on Thursday’s commodity board, led by a 6.1% drop in July soybean meal. After coming within $1 of matching the high, July bean meal is taking the brunt of selling and appears to be forming a double top. There are no real solid reasons for why we are this weak, other than markets being overbought and long funds taking profits.
However, dry weather is now forecast into the very end of May in Brazil, so safrinha yields are dropping like a rock. Slowed barge traffic on the lower Mississippi is given some credit for the weakness in the front end. Also, the western Midwest Corn Belt is dry. Some rains have fallen in the southeastern portion of the region, but the past 30 days have been the driest on record since 1980 for the Corn Belt west of the Mississippi River.
One would have thought that lower ascending corn prices would spark a fire under the cattle contracts, but instead both the live cattle and feeder cattle contracts fell lower. As traders watch the contracts trade lower, it’s almost as if they want to better understand how serious this movement is before they make another move. The cash cattle market is still painfully quiet with only one bid renewed in Nebraska at $119-120. The lean hog market also saw weakness on the day Thursday as well. Weekly export sales numbers for both beef and pork were down.
Farm and Ranch Director Jesse Allen has our closing report: https://lightningstream.com/ajax/GetODFile.ashx?call=MIDWEST&fileid=1406
Also, more analysis with Jesse Allen and John Heinberg of Total Farm Marketing on today’s episode of Market Talk: