Grain and livestock futures had an ugly day on Thursday.
Randy Martinson, Martinson Ag, says the risk off commodity wide selling was tied to new highs for the year in the dollar index.
Plus, the market is getting back to reality about possible tariffs and a trade war as the Trump Administration cabinet selections are announced.
Technical selling was also a feature as key support was taken out on the charts of many markets.
“We took out $4.25 support on December corn and now won’t find good chart support until $4.00 and January soybeans took out the $10 levels and November went off the board at $9.85,” he says.
Soybean meal made new contract lows and all three wheat exchanges ended close to their previous contract lows as well.
Martinson says besides demand news there hasn’t a lot of bullish fundamentals for the market to rally on.
USDA reported a flash sale of 6.5 million bu. of soybeans to unknown destinations but that may have even been a disappointment to the market as he says there have been rumors for days of large Chinese purchases, including the U.S.
Soybeans and wheat are also drifting without any weather concerns.
“The rains have continued to fall in South America for the planting season and moisture conditions have improved in the winter wheat areas in the U.S.,” he adds.
As a result, CONAB increased their Brazilian production estimates for both corn and soybeans Thursday morning.
Cattle futures saw selling pressure resume with the hotter than expected PPI data, some light cash at lower money and lower cutouts.
Cash cattle trade in the North developed on a light basis Wednesday at mostly $290, down $3 from last week with light trade late in the day in the South at $185, down $2.
Choice boxed beef was down $2.66 at noon and Select fell $2.04.
Lean hog futures continue to consolidate with profit taking and lower cutouts which were down $4.23 at noon with a $26 drop in bellies.
