Ag markets were mostly lower on Tuesday, June 2, except for cotton and hogs. Grain markets saw increased risk-off selling and fund long liquidation. Randy Martinson of Martinson Ag Risk Management said open interest has increased as the market declined. “That tells us that, there’s liquidation going on, but there’s new shorts coming into the marketplace and it’s likely the funds selling or getting out of their positions.”
Martinson said weather is currently a key factor driving market behavior. “Seasonally, this is what happens this time of year. You know, our weather is starting to show up to be pretty benign. You know, nothing threatening as far as the next 15 days out for pretty much most of the Plains and the Corn Belt.” Despite first crop ratings being below expectations at 67% good to excellent for corn and 66% for soybeans, he said the market disregarded these figures due to positive weather outlooks.
Martinson noted that speculators are taking profits as they become comfortable with crop size projections. He explained that technical trends in grain markets have been damaged, especially in corn where support was broken recently. For December new crop corn futures, he observed that while the market took out its 200-day moving average, it is still holding an uptrend line area: “Most definitely…looking at where support is…it does look like right now we could possibly get down to that $4.50 area.”
Soybeans have held up better than other grains due in part to strong crush demand and hopes for Chinese purchases. Martinson stated: “I think there’s just a little more concern that with the China business, the funds don’t want to take that market down too far and then see a surprise and have to dig their way back up again.” However, China’s agriculture ministry announced plans to lower soybean imports in 2026 compared with 2025 because of a shrinking hog herd.
Wheat has lost over $1 from its recent highs despite poor harvest results reported in Kansas; ample stocks and slow demand continue to weigh on prices, according to Martinson. Spring wheat acres may also be down due to wet spring conditions in Northern Plains states.
Cattle futures fell amid rumors of New World Screwworm cases near U.S. borders; however, USDA Secretary Brooke Rollins told reporters no case had been detected within U.S. territory, with only one found nearby on May 30 in a goat close to the border. Hog futures staged key reversals after early session lows attributed partly to short covering following higher pork cutout values.
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