Grains end lower on Friday with cattle and hogs mostly higher.
Corn and Soybeans See Harvest Pressure
Tommy Grisafi with Nesvick Trading says corn and soybeans saw selling late in the session as harvest and hedge pressure picked up.
Corn and Soybeans Hit Chart Resistance
He says corn and soybeans both hit stiff resistance on the charts that the market was unable to take out sparking some profit taking.
What Will it Take to Get Above Resistance?
Grisafi says the markets have been able to get above those levels in the past but have not stayed there very long before farmers jump in to sell.
So what would it take to close above those chart areas?
He says a China deal would be one fundamental that could help but a South American weather problem would be another.
He also thinks that grain prices are also a value to end users and so strong demand could help.
Will the U.S. Get a China Deal?
Soybeans rallied off lows this week and closed more than 4 cents higher mostly in reaction to President Trump’s social media post promising that soybean purchases would be discussed during his meeting with President Xi late October.
Grisafi says that could go a long way in supporting the soybean market.
Will Farmers Get a China Deal and Trade Aid?
The Trump administration also talked about $10 to $14 billion in trade aid, mainly for soybean producers hurt by the China tariff and trade war.
Details will be announced on Oct. 7.
But Grisafi thinks its unlikely the administration would provide a trade payment if they thought they were also going to get a deal with China that includes soybean purchases.
Are Farmers Storing the Crop Hoping for a China Deal?
Grisafi says many of his clients are storing soybeans for the first time in many year this fall and hoping for better prices.
That is especially true for those in the Dakotas and Minnesota that are facing over $1.50 negative basis levels.
Are Grain Markets Attracting Speculative Money?
Grisafi says getting speculators to buy the grain markets may be a tougher lift.
The reason is there are many other more attractive investments for speculators to buy including gold and the stock market, which has been making new highs.
