Corn and wheat continue to consolidate on end of month profit taking, with risk off from a lower stock market and lack of a new weather story according to Vince Boddicker, Farmers Trading Company.
So, is the weather rally over? Is this a trend change or just a healthy correction in a bigger bull market?
Boddicker says the wheat markets rallied nearly $2 off the lows, “And we did reach a 62% retracement of the whole big move in September Kansas City wheat, so it is looking tired and may be seeing some profit taking and farmer selling or hedge pressure.”
However, the market has already factored in the crop concerns in the Black Sea and EU and even a story that India was lowering its 40% import tax to buy wheat for the first time in six years failed to rally the market Wednesday. “The market needs a fresh weather or production story for the rally to continue,” he says.
With corn planting in this week’s USDA Crop Progress report reaching 83% he says that market may be taking out some weather premium.
Soybeans try to bounce with meal after two down days with losses of nearly 35 cents and after holding chart support. However, Boddicker says that market has also priced in some of the South American production concerns.
Cattle are 2-sided trying to recover after a flash crash yesterday on news China was banning U.S. beef from a Greeley, CO, JBS plant due to ractopamine. However, end of month profit taking is also a factor and the second day of losses in the stock market isn’t helping.
Lean hog futures are still searching for a low, but Boddicker thinks technically the market is close to finding support.
