Grains leaning higher as the wheat market is pulling up corn and soybeans. Hogs are also higher with cattle in the red.
Darin Newsom, Senior Market Analyst, for Barchart says the grain market is just seeing end of week short covering in all three sectors as he doesn’t think fundamentally anything has changed to warrant a rally.
While corn is higher it continues to hit chart resistance around the 50-day moving average, which is around $4.49 basis the July contract. He says it will take a bigger story or weather issue to get the market above that level.
Markets are watching weather, planting progress and outside markets. There is a storm system forecasted for the Southern Plains and Midwest this weekend which could be supporting trade short term. Although there are many dry areas yet in the main production areas for corn and wheat that could benefit from this rain and it will only slow planting for a short time.
Grains are also shaking off the strength in the dollar with non-farm payrolls coming in hotter than expected and unemployment a bit lower at 3.8%. But will any of this data really change the Fed’s course on interest rates? Newsom doesn’t think so and Fed Chairman Jerome Powell has said their job is to keep inflation under control and the market may have gotten ahead of itself thinking there would be several cuts coming in 2024.
Cattle futures are lower and continue to see fund profit taking with concerns about HPAI. Newsom says he expects the pressure to continue as speculators have decided they want out of the cattle market while they seem to be buying in hogs which are into new contract high areas in the June contract into the deferreds again.
