Grain and livestock markets are mostly higher Wednesday, except soybeans and meal.
Tomm Pfitzenmaier with Summit Commodity Brokerage, says wheat is seeing fund buying as it adds both weather and war premium.
Iran’s missile attacks on Israel has the wheat market adding geopolitical premium, while dry conditions in the Southern Plains and Black Sea continue to support wheat.
Higher wheat and crude oil is lifting the corn, which made new highs for the move overnight, but the market is also seeing fund short covering.
Soybeans and meal are correcting with some rain chances in South America.
Pfitzenmaier says the funds may also be about done covering their short positions in the soybean complex.
Historically, he says when corn and soybeans have a fall rally in August and September the markets top out in the October.
For corn the top is put in between October 7 to October 20 or a few days either side of the October WASDE report, but may have also coincided with a pick-up in farmer selling as storage filled up.
Those rallies ranged from 36 to 50 cents and corn has rallied nearly 50 cents this year, so while the top may not quite be in, we have already seen most of what would be expected from a fall rally.
The sell off following the top in the market in similar years ran from 28 to 45 cents and
last into the November/December period.
For soybeans, he says similar years from 2015 to 2019 have seen rallies that began in the August/September period with the highs in those years reached in the October 13 to 27.
The November contract rallied from 66 to 94 cents in those five years.
This year’s rally has been $1.14 with the high put in on September 30.
Cattle futures continue to see fund buying pushed by higher cash and cutouts and he thinks there is more upside left.
Lean hogs are also seeing technical buying with stronger cash, cutouts and demand but need to take out the September highs to keep going higher.
