Grain markets were lower except for soybeans, while cattle and hogs experienced a rally, according to a May 27 report. Corn and wheat futures saw further fund selling and long liquidation at the end of the month, which was triggered by war headlines.
Chuck Shelby with Zaner Ag Hedge said, “I think the funds decided to liquidate some corn and wheat positions, you know, whether or not the ceasefire holds and all that and crude oil being down seem to impact our decisions. It’s also going into the end of the month, so a lot of times funds will try to rebalance their positions and start back over as we get into the month of June.”
Shelby noted that corn planting progress reached 86%, ahead of the five-year average of 83%. However, he said wet areas in Southern Illinois, Indiana, and Ohio could pose challenges for completing planting. “There’s still crops that need to be planted and replanted in the wet areas. The cold spring we had in parts of Eastern Corn Belt really caused some problems. There’s corn that would need to be replanted. That was the most amount of corn we ever replanted on our farm,” Shelby said.
The winter wheat market ignored crop ratings showing 26% good to excellent—down one percent from last week—and poor to very poor at 44%, up one percent. Shelby stated there is potential moisture coming out West during harvest time: “Wheat really has some upside momentum as we go forward but right now you know with the movement of the funds and everything it’s certainly going to be an interesting harvest.”
Soybeans ended off their highs but held up better than corn or wheat due in part to strong product values. Shelby said China may be buying products at low enough volumes not detected by flash sales: “That’s always the unknown that really can drive this market… I think they’re aware where prices are and potentially that could be a motivating factor for them to buy if the crop turns out to be as good as a normal crop.” He added soybean processing margins remain over $3 per bushel.
Live cattle futures closed higher after digesting recent reports; Shelby attributed this strength partly to short covering at month-end: “The boxed beef being strong shows your consumer demand is still there… Probably a little bit of fund money coming back into these markets.” Lean hog futures also rose on short covering after an extended downtrend.
