Grain futures pulled back in midday trade Tuesday after a recent rally, as traders took profits and weighed improving crop conditions against forecasts for intense heat across parts of the Corn Belt and Plains.
December corn futures were down 1 cent to $4.72, while November soybeans fell 8 1/4 cents to $12.18. Wheat futures were also lower.
Don Roose with U.S. Commodities said the grain markets were due for a pause after recent gains.
“We got overbought in the market. We’ve run into some resistance on the corn right here. We made contract highs in September soybeans yesterday. So we’re getting just a little bit of a technical break.”
Roose noted soybean crop ratings improved this week, which could signal a larger crop, but said weather will remain the key driver.
“We’ll see with some terrific heat coming at us from Iowa, Nebraska border west, up and down the northern plains, down to Texas next week. We’ll see. It’s a work in progress whether we have a contra-seasonal market going on or not.”
Livestock futures also came under pressure after opening stronger. October live cattle were down $1.12 at $222.17, while August feeder cattle dropped $4.10 to $347.90. October lean hogs were modestly higher.
Roose said the cattle market may be trying to establish a short-term bottom, but this week’s cash trade will be critical.
“Discounts are just huge on the basis levels. In other words, the futures is too low versus the cash. So it’s going to be key what happens to the cash this week.”
