Grain and live cattle markets are higher early Wednesday, with lower feeder cattle and lean hog markets.
Kent Beadle, Paradigm Futures, says the grain rally is being supported by technical or fund buying, the U.S. lower dollar index and weather.
Wheat has been leading the rally the last three sessions on U.S. and global weather concerns.
Beadle says Northeast China is extremely hot and dry, Russia’s wheat crop was damaged by frost and even the U.S. crop is facing some challenges due to disease and cold temperatures in North Dakota affecting the spring wheat.
Funds were record short in the combined wheat classes and they are covering shorts and pushing futures into chart resistance with SRW wheat trying to clear the $5.50 mark.
Corn has been following wheat and also seeing short covering but has a developing weather story of its own.
“There are areas of the Corn Belt that are seeing planting delays. Ohio has 3.2 million acres of corn to plant and has only seeded 40% of the crop,” he points out.
July corn also closed above the $4.50 resistance area on Tuesday and is seeing follow through fund buying as a result.
Soybeans have been lagging but took off Wednesday with a push from the bean oil market.
The soy complex has been watching the House budget reconciliation debate and there seems to be some movement on the 45Z tax credits, after talk early in the week the extension of the green energy incentive might only run through 2028.
Cattle futures are mixed with live cattle trading higher and continuing to consolidate off the recent key reversals.
Futures are still at a discount to last week’s record cash and Choice boxed beef values have moved close to $360.
The key will be where cash develops this week.
Feeder cattle futures are lower with the rally in corn prices.
Higher feed prices also weighed on lean hog futures early, in addition to the premium the futures are holding to the cash index.
However, Beadle explains the deferred lean hog contracts are just off of contract highs and are still presenting some profitable margins for producers.
