Grains closed mixed on Thursday, with a lower day in livestock.
Corn and soybeans forged more new lows for the move on relentless fund selling, but fundamentally it has been tied to weather and report positioning.
DuWayne Bosse, Bolt Marketing, says the trade is leaning too bearish heading into the USDA reports, but corn and soybeans have also experienced selling tied to improved weather and rain in the Eastern Corn Belt.
In addition, there has been farmer selling and pricing of basis fixed contracts ahead of first notice day on Friday for the July contracts.
“I think the trade is trying to price in an additional 2 million acres of corn,” he says.
This is despite average trade guesses only showing an increase of around 300,000 aces of corn and 250,000 acres of soybeans.
Prevent plant and acres now flooded will not show up on this report according to Bosse.
Quarterly stocks also show a potential build in stocks of corn by 770 million bushels, with 166 million bushels of soybeans and 114 million bushels of wheat.
Bosse thinks a lot of bearishness has already been priced in, so if there is a bullish surprise it could create a big, short covering rally.
However, November soybeans need to hold $11.00 and December corn took out $4.40 support and need to hold Thursday’s closing price around $4.33.
Wheat was up 12 to 18 cents in the three exchanges on short covering as the market was oversold and due for a correction.
Exports were a little better this morning at 24.5 million bushels and the Stats Canada acreage figure came in 300,000 below estimates, but Bosse doesn’t think that was enough to justify the rally so it was mostly technical.
While cattle futures were mostly lower except for the June live cattle contract made another all-time high for the spot month chasing higher cash before expiration.
The rest of the live and feeder cattle futures saw profit taking going into the end of month and end of quarter.
