Corn and soybeans recover Thursday, with wheat and livestock lower.
Chip Nellinger, Blue Reef Agri-Marketing, says soybeans and products led the rally and recovery on talk of a China deal by President Trump and a lower dollar.
“That brought the buyers back in,” he says.
Corn followed soybeans, with help from higher crude oil and a the lower dollar.
However, Nellinger notes that corn seems to be bought on every break which is very impressive.
He thinks not just the commodity funds are buying but also the index funds.
They are buying as a hedge against inflation but have also seen the strong fundamentals in corn including the pick up in demand.
“Exports on corn have been stellar and the U.S. is the only game in town for a while,” he remarks.
Wheat futures continued to consolidate after new highs for the move yesterday and the negative technical reversals.
However, Nellinger thinks the wheat market is removing weather premium with a warm up in the forecast for winter wheat production areas.
Cattle ended lower in both live and feeder cattle futures on fund long liquidation and positioning ahead of the USDA Cattle on Feed Report.
Choice boxed beef has continued to slide despite packer kill cuts, which may also be a disappointment to the trade.
Nellinger thinks the cattle market will find decent support on the charts and that futures cannot fall too far with the huge premiums the board is holding to the cash.
There was some light trade reported in the cash cattle market as Southern live cattle traded for $199, $4.00 lower than last week’s weighted average, and Northern dressed cattle traded for $315, $5.00 lower.
Lean hog futures suffered the same fate with fund long liquidation end of month and after recent contract highs.
However, a $7 plunge in pork cutout values the last two days seemed to start the selling according to Nellinger.
