Grain and livestock futures are mostly higher early Tuesday.
Kent Beadle, Paradigm Futures, says grain markets are rallying and corn made another new high for the move and one year highs and soybeans are seeing double digit gains.
He says the market breathed a sigh of relief there are no immediate Chinese tariffs being imposed by the Trump Administration, that sent the U.S. dollar index sharply lower which is also supportive.
However, Mexico and Canada have been threatened with 25% tariffs on Feb. 1 if they refuse to cooperate in stopping illegal drugs and immigrants from entering the U.S.
Beadle says part of the rally in the grains is tied to South American weather.
Some rains was received in dry areas of Argentina and Southern Brazil over the weekend but the extended forecast is looking drier once again.
He says Central Brazil is also seeing too much rain and there are early harvest reports in Brazil of disappointing yields.
The grain futures are all into chart resistance that will need to be taken out to keep the rally moving forward.
Corn is looking at $5 resistance, while soybeans are challenging recent highs and all three wheat classes have been stopped by 50 day moving average.
The funds have gone long in the soybeans and soybean oil now and have extended their net long in corn.
Cattle futures are mostly higher early Tuesday working in last week’s record cash.
The five area weighted average was at $203.67, a record for the third week.
Lean hog futures started higher but have turned mixed, perhaps concerned about possible tariffs on Mexico and Canada on Feb. 1 and looming fears of the impact mass deportation may have on meat processing plants.
