Grains lean higher on the close Wednesday with big losses in cattle and hogs.
Ted Seifried, Zaner Ag Hedge, says soybeans have been seeing continued strength off the bullish WASDE numbers and lower acreage allowing it to clear some technical objectives.
However, can soybeans continue to move past the next chart resistance and above $11?
Seifried says bean oil has been contributing to some of the strength but it may have most of the buying tied to optimism about the 45Z policy already priced in.
He says fundamentally it would help to see more progress with China and for corn and wheat futures to finally bottom as they have been anchoring the complex.
Corn and wheat both scored reversals off the new lows printed on Tuesday.
So are those markets trying to bottom or was it just short covering by the funds?
Seifried thinks the pressure may be close to subsiding as corn finally bull spreading.
Corn went through several days of seeing the Jul/Dec spread collapse tied to the lower wheat market and a bigger Brazilian corn crop.
New crop corn prices have been capped with the favorable weather and ending stocks building into 2025-26.
Seifried isn’t sure the wheat market has put in a low.
“I don’t see any fundamental reason for wheat to bottom, especially as early results from the Wheat Quality Council Tour are confirming an improved crop and yields near last year,” he says.
Live and feeder cattle futures made new contract highs again and then closed sharply lower scoring key reversals?
Is this a top or just a routine correction??
Seifried says the market was overbought and due for some profit taking.
However, there is also unconfirmed trade talk that New World Screwworm has been found in the U.S. and that is spooking some of the fund traders.
Lean hog futures also consolidated with cattle but were unable to clear $100 resistance in the June contract already Tuesday.
Seifried says that market has had a good run on China optimism and was likely due for a short term correction.
