Risk Off Selling Continues in Corn, Soybeans and Cattle: And It's Not Just About the Reports
Markets Now Early Markets 3-27-24
Corn and soybeans continue to see technical selling pressure ahead of USDA reports but also with increased uncertainty tied to HPAI and the Baltimore port closure.
DuWayne Bosse, Bolt Marketing says there are a lot of market factors influencing action, but uncertainty is generally negative for markets.
While there isn't much grain that is exported out of the port of Baltimore there is a great deal of ethanol that is exported through that area. That has had a negative impact on the corn market.
Plus, corn was lower in sympathy with the cattle market on ideas of lower feed demand with the confirmation of Highly Pathogenic Avian Influenza in dairy cattle.
The HPAI news was especially bearish for cattle with ideas of cow culling increasing slaughter rates and beef supplies on the market. However, Bosse thinks the market is overreacting since HPAI can't be spread from cow to cow and meat and milk are safe. The problem is the cattle market doesn't like uncertainty.
He thinks cattle have topped for now, but he is hoping the market can stabilize as cooler heads prevail.
The hog market had shaken off the HPAI news plus hogs have seen some cattle/hog spreading and higher cutouts, which has lifted values. Hog traders are also positioning ahead of the Quarterly Hogs and Pigs Report.
Bosse says China also announced they are liquidating more of their sow herd to get down to 35 million sows which may be supportive.
