Grain Markets see more pressure with the risk off attitude regarding tariffs and with acreage estimates being released. Meanwhile, weather propelled cattle to fresh highs.
Farm Journal Interview with Kent Beadle
Grain markets largely declined, with old crop corn as the exception, showing strength in nearby contracts due to robust demand. Despite tariff fears dragging corn prices well below their $5 highs, global stocks-to-use ratios remain tight—second tightest since 1995/96 outside China. Strong ethanol production (1.1M barrels/day), export inspections, and livestock conversions bolster demand, suggesting prices may not fall further. However, new crop corn faces pressure from larger acreage estimates, with some surveys projecting up to 95 million acres. Analysts lean toward lower acreage, citing unprofitable prices across grains, potentially shifting marginal acres to pasture.
Soybean markets also saw pressure, though Brazilian basis levels—up $1-$1.25 from last year—support prices. Despite a projected record crop, estimates have dropped from 180M to 170M tons, with weather challenges possibly tightening supply further. U.S. soybean carryout is pegged at 320M bushels, leaving little room for yield losses without hitting pipeline minimums.
Wheat consolidated after hitting chart resistance at the 50- and 100-day moving averages. Moisture in the plains, seen as beneficial, weighed on Kansas City wheat, which fell the most after a recent rally.
In livestock, cattle futures reached fresh highs, shrugging off earlier stock market weakness and buoyed by a recovering equity market and weather concerns in the plains. The upcoming Cattle on Feed report is expected to reinforce bullish fundamentals with tight supply. Hogs, however, pulled back for the third day, reflecting a seasonal correction after a strong winter rally, with analysts anticipating further consolidation into spring. Markets also stabilized after Federal Reserve comments signaled two rate cuts, easing concerns of tighter policy.
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