Row crops end lower Thursday, with wheat and livestock higher.
John Heinberg with Total Farm Marketing says the corn and soybean markets are seeing continued harvest pressure with dry weather in the U.S. but are also removing South American weather premium.
He says forecasts continue to show rain in Brazil for the next couple of weeks and confirmation of the moisture could produce some additional downside price risk in soybeans.
“Obviously these are early rains, the key will be that December, January, February window when that crop is really getting put together. Again, if the perception is the crop in Brazil is going to be solid on top of a good crop here there’s just going to be a lot of beans on the global scale,” he says.
Heinberg is watching support at $10.11- $10.12 area on the November soybean charts as the market has bounced off that level the last couple of days.
“If that were to break that could open us up to go challenge the downside of this market in terms of a downtrend line that runs off those lows. That would be around that $9.80 area and if that doesn’t hold there could be a retest of the contract low area,” he explains.
The grain market was also experiencing some jockeying ahead of the WASDE Report out Friday morning.
Expectations are for a slight cut in corn and soybean yields and trimming of both production and ending stocks.
However, Heinberg says the funds have been exiting short positions for a while and so they may have some of this already priced in which could set the market up for a surprise.
Plus even if soybean yields are trimmed the carryout could be around 550 million bushels, and one of the largest carryouts in the last decade.
Heinberg says the balance sheets could be more positive for the corn market with ending stocks possibly falling under 2 billion bushels.
Wheat saw additional fund short covering and was adding risk premium with dryness in Russia and possible export curbs announced in an emergency meeting Friday by the Ag Ministry.
Live cattle futures saw some follow through selling on the open and then rallied into new highs for the move on fund buying and steady to $1 higher cash.
The Southern feedlot areas traded mostly $187 live, which is up $1 from last week’s volume.
Meanwhile, in Nebraska live sale prices were also trading at $187, but dressed business was at $296, which was steady with last week.
Boxed beef cutout value were also higher at noon with Choice at $308.18, which was supportive.
Hogs followed cattle but also saw strong weekly exports.
But will the funds keep pushing the meat markets?
