Corn futures followed the soybean market higher early Tuesday morning, but reversed sharply in the wake of the weekly Export Inspections report from the USDA. The news that the latest weekly total reached just 9.5 million bushels apparently disappointed CBOT traders, since the nearby contracts turned decisively lower from that point. This also seems to set a weak tone for Friday’s Export Sales report. March corn had fallen 5.25 cents to $6.935/bushel by late Tuesday morning, while December tumbled 5.50 cents to $5.575.
Soybean futures rallied strongly Monday night and Tuesday morning in response to news that recent rainfall over dry Argentine fields had proven rather sparse. Moreover, forthcoming rainfall seems likely to improve little, which implies increasing damage to their second-quarter harvest. The weekly Export Inspections report was also supportive of bullish positions, since the 40.4 million bushel result topped expectations in the 29-35 million bushel range. March beans had spiked 39.5 cents to $14.64 around midsession Tuesday, while March soyoil surged 0.60 cents to 52.22 cents/pound, and March meal gained $14.4 to $423.8/ton.
Wheat futures turned downward despite a supportive result on the weekly USDA Export Inspections report. That is, traders were reportedly looking for a weekly total in the 15-20 million bushel range, while the actual result came in just over 30 million. We suspect bulls found no backing for an upward surge and sold aggressively. On the other hand, the market may simply be reacting to forecasts for strong precipitation later this week and again next Monday-Tuesday. Whatever the cause, the mid-morning breakdown seemingly bodes ill for the short-term wheat outlook. March CBOT wheat futures dove 13.75 cents to $7.285/bushel late Tuesday morning, while March KCBT wheat dropped 11.75 cents to $7.6575, and March MGE futures plunged 11.75 cents to $8.1175.
Cattle traders probably began this week expecting a bullish follow-through to the bounce posted late last week. However, that was not the case Tuesday morning. We tend to blame pessimism about short-term wholesale prospects, since grocers traditionally tend to curtail their beef purchases during the second half of most months [since they have (hypothetically) already met their needs early the month following]. This seemingly bodes rather ill for short-term cattle market prospects. April cattle sank 0.80 cents to 129.65 cents/pound in late-morning activity, while August declined 0.47 cents to 126.25. Meanwhile, March feeder cattle dropped 0.57 cents to 142.80 cents/pound, and August had fallen 0.90 cents to 156.00.
Hog futures also proved quite weak to start the holiday-shortened week. We suspect general anticipation of a seasonal through late February and March played a role in the drop, but traders may also have been reacting to talk of cash and wholesale weakness. Neither the concurrent drop in fed cattle futures, nor the bearish technical situation could have been particularly encouraging either. April hogs plummeted 1.07 cents to 83.17 cents/pound Tuesday morning, while June dipped 0.70 cents to 92.25.