For the week, May corn was up 11¼ cents and December was 9¾ higher. May and November soybeans both climbed 9½ cents. May soybean meal was up $4.30, with May soybean oil 56 points higher. May Chicago wheat lost 11¼ cents, May Kansas City lost 1 cent and May Minneapolis wheat fell 3 cents.
After a four-day rally, corn ended lower on Friday, pulled down by lower wheat prices, and profit-taking. Bryan Doherty with Total Farm Marketing says it was kind of disappointing, but, at the same time, corn did close higher for the week.
“Corn has a lot of deliveries to work through in the next week or two, so the pipeline is probably full, and the end user still doesn’t look like they are chasing this hard,” he explains. “Nonetheless, it’s going to be a good technical week for corn as we post what we call a hook reversal upward.”
Now that the market is past option expiration and first notice day for March contracts, some of the pressure tied to farmer selling and fund liquidation has been taken off the market. The funds are record short in corn, and Doherty thinks they might have extended that position far enough.
Does this finally confirm a low in corn? Doherty says end users are only buying what they need, while sellers and speculators are continuing to pressure the market. Plus, farmers have to move the grain or make a decision. Right now, he says, the market is in transition.
“It hasn’t turned all the way yet, but we’re hoping the speculators will start to get out of the market and their short position soon,” he says.
Doherty thinks the funds might liquidate some of that position moving into the spring, with the uncertainty in both the Southern and Northern Hemisphere, it should also be a wakeup call to end users to take advantage of the lower price.
Soybeans bounced on Friday with some short covering after heavy deliveries on Thursday, which pushed futures into new contract lows.
The soybean market did end higher for the week, but again, Doherty says it’s in transition. He isn’t confident the soybean market has put in a low because the continued Brazilian harvest pressure will be a headwind as well as their lower prices verses U.S. soybeans. Private estimates currently have the Brazil crop around 150 million metric tons, down 15 mmt from early in the season. Doherty says with the recent weather the perception is production has stabilized.
Wheat futures saw a sharp selloff in all three exchanges and lower weekly closes. Doherty saws the consolidation was partially technical selling. Prices ran up into resistance areas on the charts earlier in the week and failed, then fell and took out key support triggering sell stops.
However, the sharply lower European wheat prices also drug down U.S. futures.
“It’s hard for the market to rebound without price strength worldwide,” he explains. “What you’ve had this week is new lows in Paris milling wheat and the lowest prices in a few years.”
Russia continues to sell wheat at lower values. There is no bullish story to rally the wheat market, Doherty adds..
For the week, April live cattle were 55 cents higher, June gained 13 cents, April feeders were down $1.98 and May fell $1.90. April lean hogs climbed 88 cents and June gained $2.68.
Live and feeder cattle futures saw some short covering on Friday after being down much of the week on profit taking. Live cattle held slight gains for the week, while feeders were lower. Doherty says that isn’t a concern: “I still think we have a bull story in cattle due to the supply side.”
