Grains end mostly higher Tuesday, wtih cattle mixed and hogs lower.
Jeff Hoogendoorn with Professional Ag Marketing says the grain markets were positioning ahead of the election, the FOMC decision regarding interest rate cuts and Friday’s WASDE.
“The WASDE Report obviously the grain market is going to be pretty focused on that. Are we going to take yields down a bit? From my perspective if we don’t take them down this time we’ve really got a solid trend that these yields are here to stay,” he explains.
Plus, underlying demand has been strong especially for corn with another flash sale of 4.9 million bushels to unknown destinations for 2024-25.
Hoogendoorn says with the recent uptick in exports for corn there will be some in the trade looking for an upward revision by USDA on Friday.
A lower dollar index and higher crude oil were also supportive.
December corn closed above some key moving averages like the 100-day but all the grains remain fairly rangebound.
He says there is a chance the results of the Presidential race will not be known Tuesday evening and that uncertainty could cast a shadow on the markets, especially the meat sector where funds are heavily long.
Live cattle closed mostly higher except Dec with unwinding of bull spreads.
Deferred contracts bounced off the 200-day moving average with funds defending their long position with the futures discount to cash and higher Choice boxed beef cutouts.
After seven higher weeks cash cattle trade was only down around $.23 last week at $189.82.
Hoogendoorn says, “I have been impressed with the strength of the cash market. I would think we could trade some solidly steady cash trade this week.”
Lean hog futures saw follow through selling and fund long liquidation after the bearish technical reversals Monday.
Hoogendoorn says its has been an impressive run pushed by technical buying and strong demand but it is possible the market is in the process of topping.
“That market has been crazy high. You just look at the strength in the cutouts and demand and it has been driven by the higher belly market. However, I would not be surprised to see big chunks taken out of the market in a hurry, " he states.
