Corn and soybeans try to extend gains early Thursday, while wheat is under pressure. Cattle set back on profit taking, while hogs are higher.
Corn Running Into Chart Resistance
Randy Martinson, Martinson Ag, says corn was trying to move higher early Thursday and has closed higher the last three days adding some weather premium as extended forecasts are looking hotter during corn pollination.
However, the December contract is running into chart resistance with the 20-day moving average at $4.25.
Martinson thinks the biggest yield numbers for corn have been priced into the market but it will take a bigger weather story to keep the rally going.
Exports were dismal on corn, a marketing year low, at only 3.8 million bu. old crop and new crop at 22.3 million bu.
Still, ending stocks are tight on a U.S. basis and world stocks to use ratios are running at 12 year lows.
Soybeans Try to Extend Gain on China Hopes
Soybeans gained 18 plus cents on Wednesday on weather and hopes for China business tied to a 4.4 million bu. flash sale of new crop soybeans to unknown destinations.
Martinson says the soybean market is trying to extend those gains early Thursday.
Exports were weak at only 10 million bu. old crop and 19.5 million bu. new crop and while it wouldn’t show up in this week’s export report, China remains absent from the list of buyers.
Soybeans may be trying to add a little weather premium as well as the August forecasts are at least leaning hotter and drier but that will need to be confirmed for the market to push through chart resistance areas.
Bean oil sees a big rally early helping to support soybeans, but soybean meal is back lower after a higher day Wednesday and despite strong weekly export sales.
Meal continues to be on the short side of spreads with soybean oil but the question is can soybeans continue to rally with bean oil if meal keeps making contract lows?
Wheat Sees Additional Pressure
Wheat is under pressure again Thursday on winter wheat harvest pressure and forecasted rains for the spring wheat areas in the Northern Plains and Canada.
Martinson says wheat has been unable to follow corn and soybean strength which has been disappointing.
Cattle See Profit Taking
Cattle futures saw early pressure on Thursday morning on profit taking after hitting more all-time highs in the live cattle and deferred feeder cattle futures contracts.
Plus, Choice boxed beef values were down over $4 on the close Wednesday which is eating into packer margins.
Strength in the cattle has been tied to the possible 50% tariff on Brazilian imports, including beef, and some news accounts of shipments already being canceled.
There has also been talk of steady to better cash trade and that will again be the key this week.
However, the breaks continue to be bought by the funds who see the huge discount the futures are holding to cash.
