By: NATHAN STUEDLE
GRAINS:
September corn closed down 2 1/2 cents and December corn was down 2 3/4 cents. August soybeans closed down 4 cents and November soybeans were down 3 3/4 cents. September KC wheat closed up 11 3/4 cents, September Chicago wheat was up 9 3/4 cents, September Minneapolis wheat was up 4 3/4 cents.
Corn and soybean futures relaxed on Tuesday with bullish momentum slowly deflating through Monday's session and giving way to follow-through selling on Tuesday. U.S. weather remains supportive on paper, though at this point given Monday's improved USDA crop ratings traders may feel they've adequately priced in preemptive risk to crops at this stage and will wait for the next round of ratings after the heat spell to gauge if any damage has been done. Wheat futures held on a test of chart support and reversed from early lows to trade higher for the eighth time in the past ten sessions as the closure of the Kerch Strait in the Black Sea threatens to hamper Russian export capabilities. Outside markets leaned bullish on ag futures for Tuesday, with crude oil higher again as hostilities have resumed in the Persian Gulf. The June CPI report was, as expected, much cooler than May with a 3.5% headline rate. The U.S. dollar was lower following the report as Treasury yields declined as well. The question is now whether the dip in inflation will prove short lived with energy markets back on the rise given the end of the ceasefire in the Middle East.
LIVESTOCK:
With nothing seeming to develop in a positive manner from the live cattle futures market's fundamentals, traders have felt the technical side of the market's pressure long enough to decide that the day's only option was to trade lower -- sharply lower. With the continued weakness in the complex, it's likely this week's cash market will trade lower too. No bids are on the table at this point but asking prices are noted at $248 in Texas. Otherwise the cash market remains quiet.
The feeder cattle contracts were also trading lower as traders simply don't have a leg to confidently stand on right now. With there yet to be any test in the fed cash cattle market, lower tones seen in sale barns across the U.S., and the live cattle futures trading lower -- it's only logical the feeder cattle contracts would trade lower too.
The lean hog complex traded mixed, with its nearby contracts continuing to push a minor rally, while the rest of the contracts trade below steady prices. If midday pork cutout values were a tick stronger, then there's a chance prices may move higher; but traders need strong, unwavering fundamental support if they're going to trade around or above market resistance at $100.00.