Grains continue to rally Tuesday with cattle two-sided and hogs higher.
Randy Martinson, Martinson Ag, says funds are covering shorts and there is new technical buying as well as the markets have cleared some key chart resistance.
He thinks China’s economic stimulus package is a big part of the push as Beijing announced a cut in interest rates by 50 basis points along with additional economic measures.
This has the trade buying on ideas of improved demand for agricultural goods from the U.S.
South America weather concerns are also supportive with continued drought in parts of Brazil slowing soybean planting.
Plus, Martinson says early harvest results have been somewhat disappointing and so lower than expected yields for soybeans and corn are supporting the markets.
November soybeans cleared several key technical points including the 50 day moving average and the August high and Martinson says a close above those levels could project prices to run up to $10.85.
December corn also got above the recent high of $4.16 and a strong close could push that market as high as $4.50.
Wheat is following corn and soybeans but he says is also trading some of its own fundamentals with dryness returning to the Southern Plains.
Plus, the Black Sea and Australia are seeing some weather concerns.
Cattle futures are trading two-sided early in the session and are due for a correction as they are into the next area of chart resistance.
However, cattle have been resilient with better cash and following strong financial markets.
