Grains see technical selling pressure from weather and planting progress. Cattle and hogs are firmer for a second day.
Kent Beadle, Paradigm Futures, says dry areas of the Western Corn Belt are receiving some much needed rain which will alleviate some of the ongoing drought concerns. However, he says its a double edged sword as this same system will slow planting efforts in not only the West, but the Eastern Corn Belt which is already seen good precipitation.
He says the grains are also suffering from the strength in the dollar which mirrors higher interest rates and inflationary concerns. Beadle says the U.S. dollar is strong, especially against the Brazilian Real which has recently weakened making their products more competitive globally.
Beadle says the market is also viewing the Middle East conflict as at least calm for now after fighting escalated over the weekend with Iran attacking Israel. This has allowed crude oil to drift lower which in turn has a negative impact on the grain markets.
Cattle futures had a strong rally Monday on short covering and are trying to extend gains for a second day. So, are the HPAI fears subsiding? Beadle thinks so and says the underlying supply fundamentals of the market are still bullish.
Lean hog futures have topped as the bearish key reversal was confirmed. However, the market is firmer again today. So where do hogs go next with continued strong demand and cutout values? Beadle says the market may be content to move sideways for a while.
