Grain and ivestock end in the green in a risk on day with a rally in crude oil supporting the ag sector but especially corn and soybean oil.
Craig Turner with StoneX says grains also saw fund and technical buying off chart support areas.
Funds may want to be flat going into the election and so they are covering some of their recently placed short positions.
However, underlying demand is also supportive with strong weekly export inspections on Monday for corn and soybeans and continued flash sales.
Mexico bought another 14.6 million bushels of U.S. corn Tuesday morning.
Cash basis levels are firming in many areas which is another indication end users are buying at these value levels.
China announced more stimulus measures this week and the market may be betting on some additional demand there as well.
Turner says the seasonals are stronger this time of year as harvest has pushed past 50% for both corn and soybeans, so hedge pressure is starting to ease.
Wheat saw spillover strength from corn and soybeans in addition to buying tied to Russia’s lower crop estimates of 80 to 85 mmt and their proposed export price floors.
Evenutally he thinks that could shift some wheat export demand over to the United States.
How much higher could prices could run on this relief rally?
Turner says, “For corn we’ve gotten back up to the $4.30 area recently we’ll see if we can get there. You know beans had a bigger rebound because of weather in South America had been dry so I don’t know if we’re going to get back up in the high $10s again but we certainly can make a run into the mid-$10 area.”
He adds the wheat market is kind of tight globally and so prices could rally into recent resistance levels.
