It was another blood bath in most of the grain and livestock futures on Wednesday, with the exception of old crop corn.
Tommy Grisafi, Advance Trading, says so far the funds have been relentless sellers in the grains with the lack of a weather threat fueling ideas of huge new crop inventory and markets are nervous ahead of the WASDE.
Despite a 4.85 million bushel sale of new crop soybeans to China on a flash sale Wednesday, he says demand hasn’t been strong enough for the grains to move the meter.
“The funds are pressing the gas, the funds have money. The stock market is at all-time highs, interest rates are still high and folks are looking to make money on something and they are going to show tremendous profits in grains,” he says.
However, he adds there is also pressure coming from farmers selling as they are pitching in the towel moving old crop inventory.
Are these three year lows in corn and soybean prices justified and what could get the funds to change trend?
Grisafi says, “They will continue to do it until it doesn’t work.”
While there may be some short covering or a profit taking rally soon but so far there hasn’t been a real catalyst, big demand or any weather problems to get the funds to buy.
“The one thing that could change that is an early frost in the North where crops are behind,” he adds.
Plus, cattle are confirming a top with a third lower close as boxed beef values have rolled over.
Grisafi says hedge pressure is starting to accelerate in the cattle markets as well as producers try to protect risk.
Lean hog futures are also lower and scored new contract lows.
