Grains end higher with corn and soybeans making new highs for the move. Cattle take a break.
Tomm Pfitzenmaier, Summit Commodity Brokerage, says corn and soybeans continued to see gains from strong technical closes on Friday and extending the report rally.
Funds are short in soybeans and meal and covered more of those positions with funds extending their length in corn.
How far will the funds push this rally and when will farmer selling start to cap prices?
Pfitzenmaier says he thinks $4.80 will be tough resistance on the March corn futures and while corn could test $5 he thinks it will be difficult to extend the rally much farther.
Some of that is tied to increased farmer selling and profit taking by the funds.
Soybean futures also make new highs for the move in tandem with corn and still digesting the 90 million bu. drop in ending stocks from USDA.
Beans also got help from the soybean meal market which was trading the dry near term weather in Argentina and trying to catch up to soybean oil.
Bean oil was up 565 points last week as a result of optimism about the 45Z guidance from Treasury, especially news that UCO or Used Cooking Oil imports would not qualify for the tax credit.
There is still uncertainty regarding that program and so soybean oil took a breather on Monday.
Again, he thinks a rally to $11 in soybeans may be difficult with the record South American crop and tariff fears.
Wheat followed corn and soybeans unlike Friday and also saw some fund short covering.
Cattle futures took a break Monday after making new highs for the move and even some contract highs on last week’s record cash, but he calls it a healthy correction.
He says cash and cutouts have both been strong on the tight supplies and he thinks its just a matter of time before February live cattle futures take out the all-time high and the $200 mark.
