Corn and soybeans see early strength Thursday, with wheat lower. Cattle are back higher.
Soybeans Rally on Talk of China Tariff Delay
Sam Swanson with The Money Farm says soybeans are seeing some early strength on short covering.
As U.S. Treasury Secretary Bessent said on Wednesday the possibility of extending a pause of import duties on Chinese goods for longer than three months exists if China halts its plan for strict new export controls on rare-earth elements.
The U.S. and China have agreed to a series of 90-day truces, with the next deadline looming in November, and economists describe the latest moves by both sides as attempts to stack up bargaining chips ahead of a likely leaders’ meeting, according to Bloomberg.
Weaker Dollar Helping Grains
A weaker dollar tied to Fed. Chairman Jerome Powell’s speech that signaled another interest rate cut in October at the FOMC meeting is another supportive fundamental for corn and soybeans early.
Strong Crush a Tailwind
He says soybeans are also getting some support from Wednesday’s record NOPA crush figure showing 197.9 million bu. of soybeans had been processed in September with bean oil stocks still at multi-month lows.
Bean oil additionally has been seeing some buying interest tied to President Trump’s threat that the U.S. may stop buying Used Cooking Oil from China in retaliation for their boycott of U.S. soybeans.
Soybeans Hold $10 on China Hopes and More Farmer Storage
Some strength in futures and slightly tighter basis levels for soybeans are also a result of more farmers storing beans this fall to wait for better cash and/or futures prices.
Swanson says the market is holding the $10 level as there is still hope for some China business late this year.
There has been talk that China is set through mid-December but still needs 8 MMT to 9 MMT of soybeans to get them through to Brazil’s next harvest.
Corn Up a Third Day
Corn futures are higher for a third session in what Swanson says is mostly technical buying and short covering after corn held support just under the $4.10 level on the December contract this week.
Strong underlying export demand and lower yields are holding up the futures market but also helping to support strong cash basis levels in some areas.
However, corn is now running into chart resistance around $4.20 where there are several key moving averages and may have a difficult time breaking through those levels according to Swanson.
Wheat Can’t Follow Corn and Beans
Wheat was not able to follow corn and soybeans early even with support from a lower dollar index.
Swanson says the main headwind for the wheat market is the ample global supplies.
However, as the rally continued to gain momentum in the row crops, wheat saw some spillover buying but its mostly short covering as funds are record short in the three classes of wheat combined.
Cattle Resume Buying on Strong Cash
Cattle futures are back higher after some profit taking on Wednesday.
Swanson says the market continues to see fund buying on the breaks but the real key has been the strong cash markets.
The cash market for feeders has been on fire and early cash in the fed market has been stronger than last week.
