Corn and soybeans ended near steady Tuesday, with wheat firmer and cattle making new contract highs.
Matt Bennett, AgMarket.Net, says corn and soybeans recovered from early profit taking pressure tied to the markets being unable to take out chart resistance.
He says the Commitment of Traders report also showed a big increase in net long positions in the corn market which may have triggered some additional liquidation.
However, both corn and soybeans recovered into the close as traders were positioning ahead of Friday’s USDA reports.
Bennett thinks the market is anticipating lower corn ending stocks but may have already priced in much of that bullish news.
“We are going to need a number well under 1.7 billion bu. for the market to react and get back above the $4.60 level,” he says.
He doesn’t anticipate yields will be adjusted but says USDA could make some slight increases in corn demand.
Soybean ending stocks are unlikely to change domestically, so the focus will be on global carryout and production.
Brazil production is likely to make up for losses in Argentina and so Bennett believes the market is bracing for a massive stocks to use ratio that could pressure soybeans.
Wheat futures ended slightly higher on fund short covering and have been nearly immune to production concerns globally, even with downgrades in Russia.
Both live and feeder cattle futures ended higher making more new contract highs chasing record cash trade.
The 5-area weighted average steet came in at $198.93, an all-time high.
However, with the funds so long in both markets Bennett warns that upside may be limited and producers should look at protecting their risk.
Plus, sources indicate the Mexican border will reopen to feeder cattle imports the week of January 20, which may take some air out of the market.
