Corn and soybeans end higher on Monday, along with hogs while cattle and wheat were mostly lower.
Dave Chatterton, Strategic Farm Marketing, says Monday’s rally in row crops was more about money flow and fund short covering on a light volume day, rather than the flash export sales.
“The export sales that we’ve seen particularly the flash sales today, they’ve been impressive on corn to Mexico here of late but not necessarily out of character. We’ll take all the sales we can get here because we’re going to need them as China is the one that is absent from that market place,” he explains.
USDA reported flash sales of 19.6 million bushels of corn to Mexico, South Korea and Unknown on Monday as well as 14 million bushels of soybeans to unknown.
The funds were covering short positions after last week selling around 63,000 contracts of corn and 19,000 contracts of soybeans.
The CFTC Commitment of Traders Report indicated funds are back short around 87,000 contracts of corn and 40,000 contracts of soybeans as of last Tuesday.
He says row crops are in a tug of war between speculative positioning, hedge selling verses end user buying down at value levels.
That could keep the markets sideways and choppy for a while.
Chatterton says the funds may want to be neutral with the uncertainty tied to the upcoming election and possible tariffs or a trade war, plus the upcoming WASDE.
Wheat initially saw support from higher corn and soybeans and disappointing rains in the Central and Southern Plains over the weekend.
However, the market ended mixed as Chatterton says Russia is still undercutting world wheat prices in their export program despite the government announcing a price floor.
Live and feeder cattle futures ended lower on profit taking as funds are now almost 86,000 contracts long in the live futures and 8,800 long in feeders with charts approaching longer term resistance areas.
He’s concerned about the divergence the futures market is showing with steady to higher cash and cutouts last week.
“If we can’t get through this $190 level on the December live cattle contract there’s going to be a little bit of deflection here,” he says.
Lean hog futures made new for the move highs as funds continue to buy but Chatterton is unsure if the market will be able to get above resistance at the contract highs but the momentum is definately in their favor.
