Chicago hog futures dipped to a three-month low on Tuesday while cattle prices eased after the U.S. Department of Agriculture said historically rainy weather would lead to a smaller corn crop than previously thought. The USDA is expected to trim its estimates for corn and soybean yields in its monthly supply and demand report due later on Tuesday.
Although adverse weather has significantly slowed US soybean planting progress this year, area and production forecasts are unchanged in the USDA report.
"The USDA ripped the Band-Aid off by lowering yield by 10 bushels (per acre) and then also lowering acreage", said Ted Seifried, chief agriculture market strategist for Zaner Group in Chicago.
The most active corn contract for July delivery closed 12 cents higher, or 2.89 percent at 4.2775 US dollars per bushel. Wheat lost 0.8% to $5.03-1/2 a bushel and soybeans were down 0.5% at $8.54-1/4 a bushel, having firmed 0.3% on Monday.
"Production growth for livestock and poultry is expected to be slower as producers respond to higher feed costs", the USDA's World Agricultural Outlook Board said in a report. Prices have since eased, but farmers remain anxious that the planting problems will reduce their profits as the sector is grappling with an ongoing U.S. Brazil and Argentina production were left unchanged. The crop is typically planted after corn. The state's five-year average is 89% for soybean planting. Soybean futures also fell on Friday, under pressure from wheat and corn, traders said.
Traders, however, said it was hard to know the crop's true condition since only 62% has emerged, well below the average of 93%.