For the week March corn was 3 ¼ cents lower, December was ½ higher. March soybeans lost 20 ¾ cents, November soybeans fell 14, March soybean meal rallied $7.80 per short ton, March soybean oil lost 220 points. March Chicago wheat was a ½ cent lower, March Kansas City wheat dropped 2 ½, while March Kansas City wheat was a ¼ cent higher.
Grains ended mostly lower on Friday with the soybean complex leading losses. John Payne with Hedge Point Global Markets says the biggest issues for the soybean market is Brazil’s soybean harvest and their collapsing basis and China’s weak demand. “I think Brazil is the reason we are lower with the anticipated value of supply and demand in the future. Plus, we’ve lost market share to China.”
However, he says traders also continue to sell the large carry in the soybean and grain markets. “The worry you have is the carry. The deferreds just continue to come down to trade with that front month contract. You can see the price go nowhere and still lose if you’re storing physical supply into the summer.”
Corn has been moving sideways according to Payne, holding above long-term support and unable to take out $4.50 on the charts. “Corn has found its price and continues to bob around that level,” he says.
Wheat ended mixed but lost early gains on the lack of bullish news and Payne says the lack of demand as Russia continues to undercut global prices.
Plus, the whole grain complex saw risk off fund selling with bearish outside markets like crude oil and the higher dollar. Those markets reacted to the better-than-expected Non-Farm Payroll (NFP), which showed an additional 353,000 jobs.
Cotton was up for the week by $2.72 with help from strong weekly exports and bidding for acres. Payne says, “It’s been a nice move. Cotton stayed firm despite the Chinese stock market getting hammered and it needs to find acres.” The S&P Informa acreage numbers were 10.7 million, which is below the past five years.
April live cattle were up $2.08 for the week, March feeder cattle gained $5.10, and April lean hog futures were up 58-cents.
Live cattle extended to new highs for the move on higher cash and technical buying. Payne says higher cash pushed the market with the backdrop of a shrinking herd and strong stock market. The funds have also been back buying after exiting much of their long position through the end of the year. Feeders saw some profit taking and consolidation after new highs for the move.
Lean hog futures were up again and have advanced with stronger cutouts. Payne says, “The hog market is a bit impressive pushed by the cutouts, the bellies specifically.” We’ve seen the cutout for July trading up to $105 with the high last year $112.
