Grain and livestock futures end mixed Wednesday.
Garrett Toay, AgTraderTalk, says corn and wheat traded higher on technical or corrective buying after holding chart support areas, with corn noteably holding $4.
“You saw other people step in here after a fairly significant 30 to 40 cent break in futures in the middle of harvest,” he says.
However, spreads have started to firm in corn tied to strong demand including the nearly 77 million bushels of flash export sales, mostly to Mexico.
“I think $4 is a value area for end users of corn,” Toay says discounting ideas that former President Trump’s comments about renegotiating USMCA may have triggered the purchases.
Soybeans set back on fund selling but Toay says the market was also removing South American weather premium and has been for several days.
“You’ve got a wetter forecast in South America,” he adds.
China economic concerns also overhang the market.
He also points out the heavy soybean balance sheet as traders spreading soybeans against corn.
Soybeans have done some technical damage after failing at $10 the November contract settled down at $9.80.
Do the funds look like they may push the short side of the grain market again?
Toay says the funds have fire power to push prices lower and its interesting to him that the lower interest rates haven’t deterred selling in the grains.
Cattle were lower except nearby live futures as the market awaits cash and consolidates technically.
“We’re back up here against the $188 level. I thought the funds were going to push the market back to new highs but the charts in December look like a rounded top here,” he says.
Toay isn’t sure if cash can trade higher for a sixth week in the fed market but says a bigger correction may be in store if futures can’t close above chart resistance.
Lean hogs saw a nice technical recovery and are seeing strong cash and better than expected demand supportive as pork is at a value to beef.
