Row crops and livestock end mostly higher Friday, with wheat lower.
Scott Varilek with Kooima Kooima Varilek says corn and soybeans were supported by strong demand initially but ended off highs as the markets ran into chart resistance and saw some election jitters and positioning.
USDA announced more flash sales to Mexico Friday morning, a total of nearly 31 million bushels.
Plus, China and unknown destinations bought over 12 million bushels.
However, corn keeps running up into chart resistance between $4.14 and $4.16 where several key moving averages are layed and that is effectively capping corn prices.
Soybeans ended just slightly higher and off session highs as the market also got caught in the tug of war between new contract lows in soybean meal and new highs for the move in soybean oil.
India came in for a rare buy of 30,000 metric tons of U.S. soybean oil as palm oil prices have hit contract highs.
Cattle futures had a wild day initially selling off on fund long liquidation but managed to end mostly higher except December live cattle.
Is this volatility signaling topping action or is the market just tired and overbought at these high levels?
Varilek says, “You know it could be. You’ve got a market that’s at near record highs and for good reason. You know we’ve got a tight supply that’s been evident and is the reason that we’re here at these levels and seeing the high cash trade. You never know when they’re going to put a top in.”
He says he’s watching the spreads, basis and the market itself for signals but with cash trading at $190 and mostly steady this week was positive as well the fact that cattle are being shipped and shuffled as packers fill their slaughter schedules.
“But we know there is nervousness in the market at these high levels with the amount of dollar we are handing, he adds.
Contract highs were scored for a 5th session in lean hogs as the contra seasonal rally continues.
Varilek says it has been supported by better than expected demand and smaller than expected inventory, but also fund buying.
However, it is difficult to predict how much higher the futures can run.
