Grain and livestock markets are mostly higher this morning.
Grain markets are seeing value and technical buying after soybeans and corn bounced off chart support areas yesterday after soybeans made new contract lows.
However, Kent Beadle of Paradigm Futures says the biggest feature supporting the recovery in soybeans is a rebound in the Brazilian Real off lifetime lows scored earlier this week in relation to the U.S. dollar index.
“That was the only new news in the soybean market as we already knew about the record crop in South America and possible tariffs. Speculators see the Real plunging to the U.S. dollar index and they sell because it makes U.S. soybeans more expensive than U.S. soybeans,” he explains.
Beadle says technically January soybeans need to close above the chart breakout below the contract lows which sets at $9.73 1/4.
Corn is getting spillover buying from the higher soybean futures but is also seeing value buying as evidenced by Columbia’s purchase of 5.9 million bu. of U.S. corn announced Friday morning.
Corn held up relatively well during the collapse of the soybean market and could actually post a higher weekly close this week.
Wheat futures are bouncing off new contract lows scored Thursday in Chicago and Minneapolis classes.
Wheat is trying to follow corn and soybeans but has been held back recently by the strong U.S. dollar.
Cattle futures saw a mixed open but are moving higher with support from the steady to $2 higher fed cash trade.
The lower closes the last two days were attributed to the break in the equity markets and end of year profit taking by funds.
However, Beadle cautions the market could see choppy trade Friday ahead of the Cattle on Feed Report.
Lean hog futures are strong again after rejecting chart resistance Thursday, getting a push from fund buying and continued lower slaughter numbers.
