Grain and livestock markets ended mostly lower Wednesday, except live cattle futures.
Matt Bennett, AgMarket.Net, says corn made new highs for the move with the March contract reaching a high of $5.04 1/2 before reversing and ending lower on the day.
It was a combination of profit taking and technical selling by the funds as corn got into another level of chart resistance, plus increased farmer selling pressure as many targets were hit on old and new crop corn at these price levels.
Is this topping action?
Bennett isn’t convinced it is because the fundamentals that have been driving the corn market higher, including demand, haven’t changed.
Wheat futures saw the same type of action with all three exchanges making new highs for the move and hitting resistance on the charts, plus he says there was a pick up in hedge pressure or farmer selling.
Bennett says the cold weather news in the U.S. and Black Sea wheat areas may also be priced into the market and forecasts are looking warmer for U.S. winter wheat areas.
Soybean futures followed corn and wheat lower, plus saw pressure from a plunge in soybean oil.
He says hedge pressure has also picked up with the advancing harvest in Brazil and some better weather in Argentina.
Bennett says, “The export inspections on soybeans to start the weak were poor and its a good indication that Brazil’s harvest has picked up with some drier weather and they have ample available supplies for China and other soybean customers.”
He says the soybean market has continued to hold key support with the strength of the corn market and with the idea of less acres being planted this spring.
Cattle futures ended mixed with live cattle higher and feeder cattle in the red.
Live cattle have bounced off key support technically and even though cash has been sliding the last two weeks, the futures are still at a discount.
Feeder cattle rallied yesterday on news of another case of New World Screwworm in Mexico and thoughts the border may shut again to feeder cattle imports.
However, APHIS affirmed the border was staying open and so the feeders retraced some on Wednesday.
The market is also gearing up for the Cattle on Feed Report on Friday.
