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Uncertainty Weighs On Grain Markets

Bearishness from the US livestock sector may or may not have a justified relationship with feed grains’ bearishness Monday. But, before a monthly WASDE report, many traders didn’t want to take the risk and chose to liquidate long Corn, Soybean and Chicago Wheat positions

Wheat futures closed with losses of 6.25 to 12.25 cents through the Sept contract in Chicago. Kansas City futures ended mostly 2.75 to 6.50 cents. Minneapolis wheat closed mostly 2 to 8.5 cents lower. Futures were pressured throughout the day as traders were unwilling to add new Long positions ahead of USDA’s Supply & Demand Report Tuesday morning.

Corn futures faced pressure throughout the day and ended mid-range, with Dec through May futures down 6 to 7.25 cents, while the deferred months saw lighter losses. Traders focused on reducing their risk exposure ahead of USDA’s Supply & Demand Report slated for Tuesday morning. Traders look for USDA to raise its 2012-13 Corn carryover from 647-M bu. to 666-M bu.

Soybean futures favored a weaker tone until around midday, when short-covered lifted the market. Futures closed near session highs with gains 2.5 to 10.75 cents. Early pressure was tied to improved weather in southern Brazil, as more rain is in the forecast for the area this week. Economic uncertainty surrounding F-Cliff negotiations also triggered a “risk-off” day in the markets.

Lean Hog futures were choppy today and favored a firmer tone on the close. December hogs closed 15 cents lower, with February and April 45 and 47.5 cents higher, respectively. Thoughts that last week’s losses were overdone provided short-covering support for lean Hog futures today, but buying was limited due to concerns about the cash Hog market.

Live Cattle futures saw a quietly traded session and ended mid-range with losses of 12.5 to 45 cents. The Bears held the upper hand in the live Cattle market most of the day thanks to concerns about domestic and export demand and in reaction to last week’s lower cash Cattle trade. Ongoing uncertainty about the F-Cliff and its effect on the US economy raise Red Meat demand concerns.

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