Corn futures closed sharply lower on Tuesday. Improved crop weather in the Corn Belt and news that China was again raising its bank reserve requirements in an attempt to slow inflation pressured the market. Crop conditions as of Sunday were pegged at 69% good-to-excellent, which was slightly above expectations and the ten-year average of 68% for this time of year. Weather forecast for this week is expected to help conditions improve. Corn traded lower despite weakness in the dollar and strength in the stock market and crude oil. July ended 27 cents lower at $7.55 1/2 and December was 19 1/2 cents lower at $6.85.
Soybean futures were solidly lower on Tuesday. The market was pressured by forecasts for improved weather for crop development in the Midwest this week, spillover weakness in corn and news that China was raising bank reserve requirement to try to slow inflation. In its initial crop rating of the season, USDA estimated soybean crop ratings at 67% good-to-excellent, which is slightly above the long-term average but below last year’s rating for this time of year. When technical support was broken, losses were extended. July closed 14 3/4 cents lower at $13.68 and November ended 13 cents lower at $13.63 3/4.
Wheat futures traded lower on Tuesday. Spillover pressure from corn, expanding winter wheat harvest and improved crop weather for the wheat crop in Europe were bearish factors. Early harvest reports show poor yields in the southern Plains, which is not unexpected, but quality is reportedly good. USDA estimated the crop was 22% harvested as of Sunday compared to the ten-year average of 14%. The MGE was lower despite continued planting delays. Spring wheat condition ratings last week were 68% good to excellent, 4% below the ten-year average. CBOT July closed 11 3/4 cents lower at $7.31 1/4, KCBT July was 11 1/4 cents lower at $8.39 3/4 and MGE July ended 16 3/4 cents lower at $9.68 1/2.
Cattle futures closed higher on Tuesday. Futures were able to bounce off of recent lows amid improved beef prices and ideas of steady to firm cash trade this week. However, further gains were limited by concern about domestic beef demand and ideas of increasing cattle supplies over the next few weeks. Sharp losses in corn limited gains in deferred contracts on ideas that lower corn prices could increase cattle feeding. June closed $1.08 higher at $104.28 and August was $1.33 higher at $105.35.
Lean hog futures were mostly higher on Tuesday. Strength in pork cutouts on Monday and ideas of increased export sales to South Korea helped support the market today. Cash hog prices were steady to firm this morning as packers as most packers are short-bought and in need of supplies. But deeper deferred contracts were mixed with weakness in corn pressuring prices amid ideas that lower feed costs could lead to increased pork production. July ended 93 cents higher at $94.45 and August closed $1.63 higher at $94.00.