A mixed close in both grain and livestock futures. John Payne, Hedge Point Global Markets, says there was positioning end of month and quarter, plus heading into USDA’s Prospective Planting and Quarterly Stocks reports on Thursday.
Soybeans did end 11 to 17 cents higher following the rally in soybean oil. Payne says, “I think soybean oil is the driver here and edible oils in general. We saw canola up, rapeseed in Europe has been doing very well. Palm oil, although it’s corrected, is moving back higher again which is all supportive for the soybean sector.”
Soybeans and products also saw end of month and quarter short covering with the funds heavily short in all three legs of the soybean complex and taking some profits. Payne also believes there is some short hedge lifting by farmers in Brazil who are selling their crop as harvest progresses to around 70%.
Corn tried to follow soybeans but failed at chart resistance and the market is trading range bound waiting for the USDA report data. He says, “The intension for the farmers here isn’t always coming through with the USDA realities and I think they’re going to show acres closer to 92 to 93 million. That kind of bearish report would take us down in corn to the mid to low $4 in corn again and that’s the worst case scenario for me I would be prepared for.”
Live can feeder cattle futures set back with the bearish Cattle on Feed placements number. However, Payne thinks it’s a short-term correction because of the bullish fundamentals, including record cash trade in cattle feeding areas in both the North and South.
