Grains are seeing pressure again early in Friday’s session with more new contract lows in corn and even soybeans, dropping below the $1145 1/4 low from May of 2023.
Kent Beadle, Paradigm Futures, says the blood bath this week has been a combination of fund selling but also long liquidation and farmer selling as March options expire today. March basis fixed contracts also needed to be rolled or priced heading into first notice day on March contracts next week. He is hopeful after that some selling pressure will be taken off the grain markets.
Weekly exports were weak for soybeans and wheat and even corn. Although Beadle says accumulated sales on corn are nearly 30% above last year, ethanol grind has been strong and at lower prices more corn is being fed in livestock rations. So, he contends the corn market isn’t suffering from a demand problem, this is all about supply.
Soybeans saw a marketing year low for exports at a time when basis levels in Brazil are running well under U.S. prices. And the market has continued to ignore lower production estimates from private sources in Brazil. “That’s because the USDA is so far above the private firms with their estimate,” he says.
Wheat exports were also anemic again this morning and the U.S. continues to be undercut by cheaper Russian, EU and Australian wheat. Technically Beadle says Chicago wheat has been building on the reversal from Tuesday but hit overhead resistance on the charts around $6 so he is watching that level to see if it can be taken out to produce a higher weekly close.
Cattle see a rally heading into the COF report with bullish placement expectations, but still awaiting cash trade development which may not come until after the report is released.
Hogs also see new near-term highs after a chart breakout Thursday and pushed by higher cash and cutouts. Weekly exports were only 28,900 metric tons and sale to China and Mexico were revised down from last week’s report by nearly 40,000 mt. However, the market has shaken it off well according to Beadle.
