Grains see early pressure on profit taking and a higher dollar, with hedge pressure in wheat.
Darin Newsom, Senior Market Analyst at Barchart, says corn continues to see commercial buying interest on weakness due to strong demand and slow farmer selling.
While the corn crop has gotten off to a pretty good start and moisture levels have improved the market will continue to monitor the forecast.
The ag and outside markets are also watching interest rates, inflation signals and other outside market influences. The dollar weakened after the Fed meeting Wednesday but is back up sharply on Friday.
However, with the FOMC leaving interest rates unchanged this week and signals of one to two cuts by the end of the year what will this mean for commodities?
Grains have traditionally been a hedge against inflation, but the funds are already short in the grain markets. So, will cooling inflation keep them short?
Newsom says he thinks the bigger inflation checks are in the metals markets and crude oil.
He says, “The energy sector is not signaling inflation as prices have failed to rally even with geopolitical concerns around the world the latest being upheaval in France with their elections.”
Cattle futures had a higher close Thursday and are up again continue higher following cash trade which was strong. Newsom says that market has seen good commercial buying interest as a result.
Southern deals were mostly $186 live up $1 from last week and the North hit record prices on dressed based cattle at $305-$306, which was $ to $5 higher than last week.
