Corn futures closed limit-up on Tuesday. Prices rallied on news from the European Systematic Risk Board that Europe’s banks are in the danger zone and risks to the economy are increasing rapidly. Pre-report positioning steered the market initially today. USDA has cut its corn production estimate sharply the last two months, but analysts are expecting little to no change on Wednesday. Some reduction in harvested acreage is expected, but analysts look for yields to be fractionally higher. December was 40 cents higher at $6.45 and March was 40 cents higher at $6.57 1/2.
Soybean futures settled solidly higher Tuesday. Prices rallied on news from the European Systematic Risk Board that Europe’s banks are in the danger zone and risks to the economy are increasing rapidly. Also supportive was news that China is looking to buy U.S. soybeans. USDA’s reports are expected to show soybean production slightly higher according to the average trade estimate of 3.094 billion bushels, which well below initial forecasts for this crop. November was 58 cents higher at $12.35 1/2 and January was 57 1/2 cents higher at $12.46 1/4.
Wheat futures ended strongly higher Tuesday. News that Russia is considering imposing an export tariff on grains if exports reach a certain level rallied the market midday, in addition to the renewed concerns over the European debt crisis. Additionally, producers are holding off on selling wheat on ideas that USDA is overestimating the size of the U.S. crop and that prices should be higher to reflect the tighter supply. However, USDA is expected to raise the forecast for global wheat supplies, which could offset decreases in the U.S. CBOT December was 49 1/4 cents higher at $6.60 3/4, KCBT December was 43 3/4 cents higher at $7.29 3/4 and MGE December was 2 1/4 cents higher at $9.36 1/2.
Cattle futures finished higher Tuesday. Prices were lifted by tight fed cattle supplies due to the extended drought in Texas and Oklahoma this year. Sliding beef prices have reduced packer margins which is making the packers reluctant to raise bids in the cash market. Trade in the cash market will probably be delayed until late in the week. Fed cattle supplies are expected to remain tight into November. December was $1.28 higher at $121.63 and February was 80 cents higher at $123.65.
Hog futures settled lower Tuesday. Supply is finally overpowering demand in the hog sector. Prices usually see seasonal weakness this time of year, but strong export demand has driven prices higher. Hog supplies are rising seasonally and slaughter is running 4% to 5% above year-ago levels. The ample supplies of market ready hogs are allowing buyers to get all the hogs they need with lower bids. December was 98 cents lower at $86.78 and February was 18 cents lower at $91.00.