Grains end steady to higher on Tuesday with soybeans the price leader on lower Brazil production estimates and weather, plus the rally in soybean oil.
Alan Brugler, Brugler Marketing says Conab lowered Brazil soybean production by 2.5 million metric tons and added to a hotter drier forecast that helped to trigger some buying in soybeans. However, soybean oil has been up sharply the last several sessions including a 118-point gain on Tuesday as that market is following palm oil prices which have been on the rise.
Funds are covering shorts with many soybean contracts above 40-day moving averages, but will they keep buying and far will they push contracts above $12? He says funds want to exit short positions with this chart action, but farmers are selling on the higher days which caps rallies, so it is a continuous circle especially as prices get at or above $12.
Corn ends off highs after running into chart resistance and with a pickup in farmer selling as futures approached $4.50. “Farmers need money to put the crop in this spring and pay other bills, so they are selling when the market rallies,” he says. Plus, there is still a large percentage of corn in storage that needs to be sold.
