Grain and livestock futures are mostly lower early Thursday.
Soybeans are down with soybean oil which touched limit down overnight on unconfirmed rumors EPA was releasing an RVO proposal to the Office of Management and Budget with blending levels on biomass based diesel well below expectations.
Mark Schultz, Northstar Commodity, says early Thursday it was only a rumor but both soybeans and bean oil had also traded to resistance levels on the charts and so it could be some profit taking as well.
July soybeans have stiff resistance around $10.80 and July bean oil had hit new highs on Wednesday and was likely due for a correction he says.
Adding to the pressure in soybeans and even corn is the weather.
Rains are falling in dry areas of the Western Corn Belt and there is more in the forecast.
Conab also released increased production estimates for Brazilian corn and soybeans this morning. They raised the soybean crop by 470,000 MT to 168.34 MMT and corn by 2.13 MMT to 126.87 MMT.
Schultz says soybeans are still in an uptrend but need to hold the 200 day moving average.
Corn futures are off of lows with help from wheat and strong weekly exports at 66 million bu. and Schultz is hopeful the pressure in the July contract has run its course.
Wheat futures also started lower but are off lows on short covering after Schultz says the market got under valued hitting 5-year lows.
“Who wants to be short this market at price levels so close to $5,” he says.
Live and feeder cattle futures gapped lower on the open and are seeing triple digit losses early Thursday.
Schultz says both markets hit new contract highs yesterday and then ended lower scoring key reversals.
So is this finally the top?
He says, “I am worried about this market just because we are at such high levels and this is not good technical action. If we can see steady to higher cash trade we can still stabilize this market but if we put in a weekly reversal lower then I will be concerned this is a top,” he says.
Lean hog futures are lower again in tandem with cattle but also seeing pressure from the premium the June futures are holding to the cash index.
Schultz says May went off the board yesterday leaving a nearly $8 premium to the Lean Hog Index.
