Grains see short covering early in the session with a lower dollar then turn mixed. Cattle are drifting lower with hogs mixed.
DuWayne Bosse, Bolt Marketing, says there isn’t much fresh news to drive the grain markets right now.
Traders are watching weather and there have been some good moisture totals in dry areas of the Western Corn Belt which were welcome. However, this system is expected to stick around a few days with colder temperatures which may slow planting efforts in parts of the corn belt.
Soybeans are oversold after making new lows for the move Tuesday. Bosse says with soybeans breaking their short-term uptrend on the charts any recovery in prices is just short covering in his opinion.
He says soybeans are down about 45-cents for the month due to the increased U.S. ending stocks. That, combined with higher private estimates coming in for Brazil’s soybean crop are weighing on soybean futures. Additionally, the Brazilian Real has devalued and is prompting some farmer selling.
However, the corn market technically is sideways, according to Bosse, trading in about a 10-cent range. “One of my clients asked me this morning where the moving averages are and I told him they are all consolidating together. That could produce a big move at some point but we just don’t have the right trigger yet to get the funds to cover their short position.”
The wheat market is keeping a close eye on the weather with forecasts for rains in HRW areas which is badly needed with crop conditions deteriorating says Bosse. Meanwhile, SRW has seen an improvement in conditions which may keep a lid on prices.
Cattle traded 2-sided early but then started to drift. That market has had a couple of up days and corrected its oversold status says Bosse. “However, cash trade looks like it will be lower this week and traders may be starting to position for the COF report.” He says early estimates show on feed at 102% with placements sharply lower which would be bullish.
Hogs are mixed but Bosse thinks the high is in after the bearish key reversal. Funds are near to record long in that market and may continue to take profits, so he thinks these prices should be hedged, at least the summer month futures.
