Grains close higher on Friday on short covering and putting in some risk premium on weather and geopolitical concerns in the Middle East.
Israel launched a strike on Iran Thursday night and Iran vowed to retaliate and with that uncertainty some fund traders may have covered short positions in the grains heading into the weekend. The lower dollar was also supportive for grains.
Rich Nelson, with Allendale, Inc. says the extended forecast shows some potential for planting delays, but he thinks it’s too early to be concerned. The market will also be keeping an eye on the extended weather as the Climate Prediction Center released its summer forecast and showed at least the potential threat to trim yields.
He says the short covering bounce in soybeans came after the market came within cents of the February contract lows and bounced off that support. The soybean meal market also rallied with concerns about a lower crop in Argentina and rains which are delaying the harvest and hurting quality.
The wheat market rallied despite some rain chances for dry HRW areas in the extended forecast.
Feeder cattle fell with higher corn prices but live cattle ended higher with steady cash at $182 in the South. The North traded $183 live and $292 dressed which was a $1 lower than last week’s weighted average. Boxed beef cutout values were also higher at noon.
Nelson says the cattle market has stabilized following the HPAI fear but he is not ready to call a bottom yet because of the upfront supplies the market needs to work through especially with higher carcass weights.
Hogs broke above chart resistance with help from the lower sow herd numbers in China. However, Nelson doesn’t think the June contract will go back and retest the contract highs.
