Corn and soybeans higher early Wednesday with wheat and livestock lower.
Kent Beadle, Paradigm Futures, says corn and soybeans rallied overnight and early Wednesday on the news China and U.S. are beginning trade talks this weekend.
He says the hope is the two sides can acheive some de-escalation of the current tariffs but a longer term deal could take much longer to finalize.
“That’s a really good start.We’re not going to come away from this meeting this weekend with any sort of major trade deal. But if there was an agreement to reduce tariffs by a certain amount with the idea that if talks can proceed over some period of time tariffs could be reduced further until an actual agreement might ultimately be signed. I think that traders will see some optimism about that,” he explains.
However, Beadle says the market is awaiting other trade deals with the EU, India and Japan that could be positive for the trade.
Wheat opened higher on the China news, but was overwhelmed by weather with rain chances again in the forecast for the Southern Plains winter wheat areas.
Live and feeder cattle futures also saw initial strength then faded.
Beadle says the market is due for a correction but has continued to be bought on breaks supported by tight numbers and the rally in the cash market, which has been up over $13 in the last three weeks.
Yesterday saw a light trade in Kansas and Texas at $218 to $220, steady to $2 higher than last week’s weighted averages. Wednesday morning some $219 trade was reported in Texas.
So far Beadle says there is no sign of slower consumer demand with boxed beef value up again Tuesday with Choice at $344.17, the highest levels since COVID.
Lean hog futures opened higher on China trade hopes and quickly sold off fading the news as hedge selling pressure stepped in according to Beadle.
He says pork producers can lock in some decent margins right now, especially with the lower soybean meal and corn prices.
