Grain markets open lower, but corn and soybeans are trying to recover early. Livestock see a Turnaround Tuesday bounce.
Tomm Pfitzenmaier, Summit Commodity Brokerage says early pressure in the grains came as a result of farmer selling on the rally.
Plus, he says corn and soybean markets made new highs for the move in Monday’s session and may be due for a correction.
“Funds may take a break as they usually buy in three-to-four-day waves.” The rally pushed prices above the 100 day moving averages for all the of the grains, but now corn and beans are into the next level of chart resistance.
Wheat pressure is coming from improved winter wheat conditions at 50% good to excellent, fast spring wheat planting at 47% done and U.S. and global weather.
The markets are also preparing for the WASDE on Friday which he says will provide the first look at the new crop estimates.
Early estimates have increased ending stocks for new crop corn at 2.284 billion bushels, with soybean carryover at 431 million bushels, which are both above last year and a bit bearish for the market.
Pfitzenmaier says the other big key will be if USDA reconciles their South American production figures for corn and soybeans and there is a big discrepancy compared to Conab figures and even more questions now with production problems in Brazil and Argentina which are whittling into their crops.
Cattle and hogs rebound on short covering and softer grains.
Pfitzenmaier says cattle have been supported by stronger cash, but rallies continue to be capped by bird flu news. “Essentially the market is chopping in a sideways range and may for a while. And while the tight numbers are supportive, weights are a problem and there are demand questions.”
Hogs bounce after taking out and closing below key support Monday. “The market is oversold after a $10 break,” he says.
