Grain markets ended lower Friday.
For the week, corn and wheat were higher again, while soybeans broke a six week streak and posted a lower weekly close.
Don Roose, U.S. Commodities, says corn and soybeans saw hedge pressure ahead of another big harvest weekend in the U.S.
“It’s respect for the time of year that we’re at. It looks like we’re going to have an open harvest window in the U.S. for the next 10 days and we’re going to get close to that 50% harvest window pretty fast,” he says.
However, technically the grain markets were also overbought, especially soybeans after a $1.14 rally off the lows, and ran into chart resistance and so some of the selloff was profit taking.
Roose says some traders were also removing weather premium.
Rains are forecasted for parts of Brazil and Argentina next week and could be beneficial for farmers planting soybeans.
“The key is whether or not this is a pattern change in South America,” he explains.
The wheat market was also trading weather with dry areas of the Black Sea forecasted to see some beneficial moisture for planting.
A higher dollar in response to the better than expected Jobs report was another culprit that weighed on grain markets, but especially wheat.
So, is the grain market signaling a top or is this just a pause?
Roose says, “It might be a case that the markets are at fair market value.”
He thinks managed money traders have covered a large percentage of their short position and may be taking a break waiting for new bullish news.
Possible market movers next week include global weather and the October WASDE and if those are bearish it could turn the trend of the markets lower.
Cattle futures ended to the plus side with higher cash at $186 in the South, up $1 and stronger cutout values at noon.
Meanwhile, lean hog futures were lower on consolidation and seasonal pressure.
