Grains shake off early weakness to close higher on Thursday.
Darin Newsom with Barchart says the reversal came as end user or commercial buying stepped in.
The corn market has seen a string of flash export sales including another 11.75 million bushels to Mexico and unknown Thursday for the 2024-25 marketing year.
He says end users are seeing value in corn around $4 and soybeans under $10 and are getting their short term needs met.
Newsom thinks its also possible export customers like China may be buying with heightened concerns about possible tariff’s and escalation of a trade war under a Trump presidency.
“Those buyers are trying to get some coverage on,” he explains.
However, prices are not likely to rally to much before selling pressure steps back in.
“In corn we’ve seen a $4.00 to $4.40 range and soybeans are a little more sporadic because we have plenty of soybeans on hand any time soon,” he says.
Newsom thinks funds may have also stepped to the sidelines in corn and soybeans and they are content to stay that way.
“Right now the funds have no reason to go long or go short,” he adds.
So where are funds moving their money?
He says the softs like coffee and the stock market have been the most attractive investments for managed money traders.
Wheat reversed to end higher following corn and soybeans and Newsom also attributed the strength to technical buying.
While the U.S. Drought Monitor showed expansion of drought areas in winter wheat country Newsom says it may be too early for the market to add weather premium.
Cattle futures ended mixed and traders even bear spread in live cattle despite steady to higher cash trade.
Newsom says the cattle market is looking tired.
