Grains end lower Thursday with livestock to the plus side.
Mike Minor, Professional Ag Marketing, says corn and soybean markets saw some early harvest pressure.
“We starting to see harvest pace pick up in the Eastern Corn Belt especially with the dry weather wrapping up the growing season quickly,” he says.
Plus some better rain chances in Brazil in early October also played a role.
Wheat fell with better rain chances in the Central and Southern Plains.
“Yeah, Northern Oklahoma it looks like we’re going to get some rain there as well, that’s going to help out that area immensely,” he adds.
However, all the grain markets have technically run into chart resistance.
“So, a little bit of a pull back here after we’ve had a nice rally in all of these grains off the lows,” he adds.
Minor is watching resistance levels at recent highs, which in December corn is around $4.23 and November soybeans at the $10.31 level.
However, with current basis levels he thinks the markets will see a lot of cash movement around $4 on corn and even more if soybeans hit $10.
Cattle and hogs and the stock market all rallied together in a delayed reaction to the Fed cutting interest rates 50 basis points, the first cut in four years.
Minor says that is positive for demand for meat and all commodities but he thinks cattle futures have also been reacting to the higher cash trade established last week.
He says the change in monetary policy may also bring some managed money back into the grains and fund traders have already covered a portion of that short position already.
“If you got back to where we started raising interest rates that was really the start of the this bear cycle. Now we’ll see what happens when we start cutting rates and if this is going to be bullish for these commodities,” he explains.
Additionally, the lean hog futures have been seeing buying by the managed and index fund traders in an effort to narrow the basis.
Minor says underlying demand has been stronger than expected for pork which has fed the rally as well, but he thinks the upside from here will be limited by the seasonal increase in numbers.
