Grain and livestock futures all saw green on Monday.
Grains were higher on technical buying and fund short covering, but led by the soaring soybean market.
Allison Thompson with The Money Farm says soybeans traded a combination of factors including China lowering interest rates as part of a bigger government stimulus package, which could improve demand.
Following that private exporters also reported an additional 6.1 million bushels of soybean export business to unknown destinations, which supported soybeans as well as export inspections at 17.8 million bushels.
However, the markets was also adding risk premium on South American weather.
“The weather pattern still remains mostly dry. There is some rain in the forecast going into the end of the week but its nothing that’s going to greatly change conditions there. They are going to need rain to ignite planting which remains behind last year’s pace,” she explains.
The soybean market may be keeping an eye on U.S. weather with the Southern U.S. expecting heavy rains tied to Hurricane Helene.
Unfortunately, November beans rallied nearly 40 cents off of Friday’s low, but could not take out the August high, and Thompson says the market needs to close above that level to keep the rally going.
“That was the top end of our range today in that $10.40 to $10.42 area and I would really like to see those highs taken out and we really need to see some follow through,” she adds.
Corn futures followed soybeans but were also adding some South American weather premium.
“The later the soybeans get pushed back theoretically we should see corn get pushed back as well in Brazil and into their dry season,” she says.
Corn also reacted to strong export inspections, which were above expectations according to Thompson.
Technically, she says December corn topped out on Monday at the September high at $4.16 and for the July contract at $4.23.
Wheat saw double digit gains following row crops but it could be building some risk premium back into the markets due to disappointing rains in the Southern Plains and various global production concerns.
Export inspections were also strong on wheat at 26.1 million bushels.
Cattle futures made new highs for the move with cash up $2 on the 5 Area Weighted Average last week and a neutral Cattle on Feed Report.
However, she says the market held gains Monday despite high grain prices and it looks like it has bottomed.
She cautions though that cattle futures may be running into the next area of chart resistance.
