Grain markets are leaning higher early Monday with wheat seeing a rally which is helping corn and soybeans. Live cattle are finding some support, with hogs lower on profit taking.
Kent Beadle with Paradigm Futures says wheat is seeing short covering as the funds are near to record short in that complex. However, wheat is also putting in some weather premium with dryness concerns continuing in parts of the wheat belt. Geopolitical premium is also being added with developments in the Middle East and Black Sea.
Corn and soybeans tried to follow wheat early but continue to get held back by chart resistance at around the 50-day moving average.
Soybeans are getting some help from the strength in soybean meal but held back by the correction in soybean oil and world veg oil markets.
Grains are also preparing for the April WASDE report and Conab will release new Brazil estimates Thursday morning. However, Beadle says Brazil basis levels have firmed and soybean prices are not much higher than U.S. prices at this time which is unusual for this time of year.
Funds pushed shorter in their combined grain position last week while they have bought in the broader based commodities like gold and cocoa, so when will funds start buying grains?
Live cattle futures are trying to recover after a tough down week but face fund liquidation on rallies it seems and need to build confidence in traders about HPAI not having an impact on beef demand.
Hogs are seeing some profit taking but have benefitted from the pullback in cattle and HPAI news with funds extending their long speculative position.
