Corn and soybeans are mostly higher early Wednesday with wheat fading. Cattle are higher, hogs mixed.
Soybeans Bounce
Soybean futures are higher early Wednesday with the easing of risk-off selling pressure as President Trump’s tariff threats against the EU unless they sell Greenland to the U.S. have calmed. DuWayne Bosse with Bolt Marketing says U.S. Trade Representative Jamieson Greer also speaking in Davos says the U.S. will engage in talks with China prior to the Trump’s meeting with Chinese President Xi in April, although soybeans and rare earth minerals may not be targeted as part of the discussions. Beijing, according to Greer, has fulfilled their entire 12 MMT soybean purchase commitment but President Trump continues to ask Xi to purchase more.
South American Weather Premium?
Bosse says soybeans may also be adding some South American weather premium as Argentina has areas that are hot and dry and the forecasts call for drought to enter the country in February. That could trim yields and production which are currently pegged at around 49 MMT. That would be particularly supportive of soybean meal.
Soybeans Need to Close Above 20 Day Moving Average
Technically, soybeans need to close above the 20-day moving average according to Bosse, which right now sits at $10.58 1/4 on the March contract. He says soybeans got above that level during the session yesterday but were unable to close above that level.
Corn Gets Push From Export Sales
Corn is trading higher with soybeans and seeing some light short covering on the easing of trade tensions with the EU, but Bosse says the market is also getting some help from flash sales. Private exporters reported 5.9 million bu. sold to Columbia and 7.7 million bu. sold to unknown destinations.
Corn Needs a Close Above $4.25
Bosse says corn is in a trading range but needs to close above $4.25 basis the March contract to extend any rally.
Wheat Struggles to Bounce
Wheat futures started higher overnight and Wednesday morning with short covering and some concern about below freezing temperatures forecast for the hard red and soft red winter wheat areas. However, Bosse says that market has been having a difficult time holding any rallies.
Cattle Extend Recovery
Cattle futures started lower but quickly found footing as funds have been eager to buy on breaks. Bosse says cattle continue to try to recover from the wicked selloff on Friday tied to rumors of New World Screwworm in the U.S. and he was a bit disappointed with the anemic recovery on Tuesday. He says the easing of risk off selling in the financial markets is helping to support the cattle futures Wednesday. However, he thinks the market could trade within last week’s ranges until either cash trade develops or the USDA Cattle on Feed Report numbers are released. That report is expected to be bullish with on feed estimates at 97%, placements at 93% and marketings at 101.7%.
