Corn futures closed 1 to 5 cents higher on Tuesday. Market prices slipped slightly before the closed but remained higher as drought conditions expand across the Corn Belt. Midwest weather conditions remain unchanged with forecasts for more hot, dry days still to come. Yesterday’s crop condition ratings showed how quickly new crop corn is deteriorating under current weather conditions. USDA pegged new crop corn good/excellent condition ratings at 31 percent, down 9 percentage points from the previous week.
Soybean futures closed mostly higher on Tuesday. Hot, dry conditions across the Midwest are expected to keep 2012 corn and soybean crops under pressure over the next 10 to 14 days. Forecasters are calling for extended periods of high heat and dry conditions with no indication of substantial rain relief. The trade will continue to closely monitor soybean condition ratings in the coming weeks as the new crop enters its key production stage. The USDA reported soybean good/excellent condition ratings at 34 percent, down 6 percentage points from the previous week.
Wheat futures closed mostly higher on Tuesday. Day session trade was volatile as wheat prices bounced up and down following movements in the grain complex. However, wheat prices managed to close higher at KCBT and MGE on tight global supply worries due to poor weather conditions in the Black Sea Region. Closing prices at CBOT were off 1/2 cent, KCBT was up 8 cents and MGE was up 6 cents.
Cattle futures closed moderately lower on Tuesday. Cattle futures were under the gun much of the session but managed a slight rebound at midday due to improvement in wholesale beef prices. However, the market could not extend gains due to weakness in the feeder cattle market and rising grain prices. Cash trade activity picked up slightly on Tuesday but initial asking prices were lower than the previous week.
Lean hog futures closed sharply lower on Tuesday. Hogs futures closed lower for the second consecutive day. Lower cash prices and steadily declining whole pork prices pressured the market from the onset of pit trade. Increased production costs due to drought condition across the Midwest pushed prices down as expectations of herd liquidation increase.