Corn and wheat end higher, while soybeans fall. Livestock end mostly higher except a few live cattle contracts.
DuWayne Bosse of Bolt Marketing says wheat was up for a 4th day holding risk premium tied to the escalating conflict in the Black Sea and despite a higher dollar.
“I think it’s all war premium isn’t it? It’s not like our exports are flying off the shelves and we’ve had a lot of rain in the Southern Plains and these winter wheat conditions are getting better,” he says.
So, how much higher can wheat prices climb?
“I think its important to note that funds are short in the wheat market. So if this war continues to escalate and people go back to thinking this is actually going to be a problem getting wheat out of Russia or Ukraine I think you could rally quite a bit because funds would want out of their shorts. That could push prices back up to $6,” he explains.
Bosse says it was impressive to see wheat and even corn close higher with the stronger dollar because it is a negative for exports which may show up in the export report this Thursday.
Corn followed wheat but continues to garner support from strong demand as evident in the weekly ethanol production report and the positive basis levels in many areas of the country.
That has Bosse friendly on corn in addition to the charts and the fund positon.
“You know what I really like about corn is that the funds are buying. What’s disappointing is they’ve gone from short some 300,000 contracts to 100,000 contracts long and the market hasn’t even rallied 50 cents,” he says.
Some traders may have also been adding risk premium to corn with dry conditions being watched in parts of Argentina, although weekend forecasts are adding some rains.
He is cautious going into December option expiration in the corn market which starts on Friday.
Soybeans saw tecnical selling, spillover from the collapse in the soybean oil market and rains in the extended forecasts for soybean production areas of South America, even dry areas of Argentina.
The market disregarded the 15.7 million bu. of soybean export business to China and unknown as well.
“That market just feels heavy to me. I am struggling because I am bullish corn but bearish soybeans and those markets don’t go in opposite directions,” Bosse says.
Live cattle were mixed squaring ahead of Friday’s USDA Cattle on Feed Report and awaiting cash direction.
Feeder cattle futures extended gains with the strong cash market continuing to push the futures.
Lean hog futures rebounded and saw the funds step in to defend their long positions after holding chart support.
