Grain markets started off lower as funds continue to sell on Brazil harvest pressure and rain chances in Argentina and despite corn biz to Mexico.
Kent Beadle, Paradigm Futures says the combined fund short position in grains and oilseeds is the shortest it has been since 2019. Funds also extended their short position in corn to 280,000 as of last Tuesday, which means they sold another 15,000 contracts. For soybeans funds hold the second largest short position ever at 108,000 contracts, which was up 16,400 in last week’s CFTC Commitment of Traders Report.
Beadle says corn continues to trade is a range despite exports being up 30% versus last year and another 6.1 million bushels of corn sold to Mexico on Monday morning. He says the upcoming WASDE may make some upward adjustments to corn exports.
The pressure in soybeans has been tied to the advancing harvest in Brazil, rains in the extended forecast for Argentina and the lack of export demand, especially from China. CONAB and USDA will both released Brazil production updates this week and are expected to lower crop size, the question will be how much as they are well above private estimates. March soybeans fell below $12 on Friday and remain under that level.
Despite the escalation of the Middle East conflict over the weekend the wheat market has failed to rally on the news. Beadle says, “I think it’s a function of better-than-expected exports out of Ukraine.”
Cattle extend gains make new highs for the move as funds buy with higher cash ideas again this week. Funds added to their long position last week with the reminder of the tight supply story and last week’s sharply higher cash fueling buying. Cash was mostly $280 in the north, up $3 dressed with southern business at mostly $178-$179, up from $3 to $5.
Lean hog futures are seeing profit taking and hedge pressure early as Beadle says prices have moved to levels that are attractive for producers to lock in some margins. In addition, the market has rallied for several days and is do for a breather.
