Wheat prices rally on Tuesday

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Corn futures closed solidly higher on Tuesday. The market was supported by spillover strength from wheat and ideas of declining crop ratings this week in the central Corn Belt. Crop condition ratings held steady last week at 60% good to excellent, which is right on the ten-year average, but crops in the central Corn Belt could use some rain. Futures were pressured at times by bearish outside markets as the stock market and crude oil were lower and the dollar index was higher. September was 6 3/4 cents higher at $7.14 and December ended 7 1/2 cents higher.

Soybean futures ended lower on Tuesday. Weakness in the stock market and crude oil and strength in the dollar weighed on the soy complex. Crop conditions reported on Monday afternoon showed steady ratings at 61% good to excellent, down from 66% last year but up from the ten-year average of 58%. USDA also reported that 70% of the crop is setting pods versus the average of 78%. September closed 3 1/2 cents lower at $13.40 and November was 1 3/4 cents lower at $13.49 1/2.

Wheat futures traded higher on Tuesday. The MGE led the gains on concerns about spring wheat production. The crop was planted late due to wet conditions and now hot and dry weather coupled with disease could trim the size of the crop. USDA estimated harvest progress at 13% complete compared to the average pace of 39% for this time of year. There is also concern about hard red winter wheat seeding this fall due to the drought in the southern Plains. CBOT closed 12 1/4 cents higher at $7.24 3/4, KCBT Sept was 6 1/2 cents higher at $8.17 1/2 and MGE Sep ended 23 1/2 cents higher at $8.96 1/4.

Cattle futures closed lower on Tuesday. The front end contract pulled slightly higher on bullish cash fundamentals. Boxed beef prices continue to strengthen while showlists are generally smaller. However, deferred were pressured by weakness in the stock market amid ideas of further debt problems in Europe. Traders are being cautious ahead of the Cattle on Feed report due out on Friday. Expectations are for increased July placements to be reported. October ended 8 cents higher at $120.75 while December was 33 cents lower at $121.18.

Lean hog futures were mixed on Tuesday. Front end contract were pressured by ideas of seasonally increasing hog supplies and that pork prices could ease once wholesale Labor Day weekend needs are covered. However, some deferreds traded higher on ideas that China and South Korea will continue to be aggressive importers of pork. October is 13 cents higher at $90.10 and December is 10 cents higher at $85.90.



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