Grain and livestock futures close mostly higher Tuesday except for nearby live cattle.
Kevin Duling, KD Investors, says grains closed higher on fund buying by both hedge and index funds.
Strong export inspections at 63.4 million bu. were supportive and the U.S. is the only export game in town until Brazil’s crop comes to market.
March corn finally closed above $5 and made new highs for the move and Duling says the next area of resistance on the charts is the May high of $5.08 and after that the next target is $5.15-$5.20.
Wheat futures also ended strong on fund short covering and adding weather premium as bitterly cold temperatures hit the winter wheat belt all the way down to Texas and with issues in the Black Sea.
Saudi Arabia also tendered to buy 920,000 metric tons of wheat fueling global demand.
The March soft red winter wheat closed above the $6 mark, which also intersects with the 200-day moving average.
Duling says this could mean another 25 to 50 cent move higher in wheat.
Soybean futures followed corn and wheat and continue to see fund buying after holding support last week and bouncing off the 50 and 100 day moving averages.
Argentina got some rain over the weekend after a drop in crop conditions by 4% last week and more dry weather in the extended forecast.
How long can soybeans hold together with the impending South American harvest?
Duling says the markets have absorbed the most bearish news and so he doesn’t think a retest of the December contract lows is warranted.
Feeder cattle futures continue to consolidate while live cattle ended mixed with nearby contracts still seeing some light pressure.
Duling says the feeders have had a nice recovery off the lows the question for him is will the market retrace back to the record highs?
