Grains rally on fund short covering. Cattle post a higher day as well, but cotton sees pressure....again.
John Payne, Advance Trading, says soybeans and soybean meal took the lead adding weather premium with heavy rains and flooding in southern Brazil and parts of Argentina.
So, are we seeing a chart breakout that will keep funds covering short positions to keep the rally going?
He says soybean meal got and closed above the 100-day moving average and that could continue to spark buying interest.
Corn followed soybeans and wheat higher but may also be trading some early concerns about planting delays with the wet forecast for the corn belt.
Payne says he’s not getting too excited about planting delays yet but liked the technical action in corn. “I am looking for July corn to close above $4.60 and that will likely be a spot where funds will be forced to cover more of their short position as well.”
Wheat was also adding weather premium due to the lack of rain in southwest Hard Red Winter areas and parts of Russia.
Cotton was lower again on disappointing exports, but the market has plummeted the last few weeks on economic concerns and demand fears according to Payne. He says cotton is down to a price level that should find support on the charts.
Payne says cattle recovered Thursday after FSIS reported negative tests for H5N1 in ground beef and with cash news higher in the North. However, he is concerned about longer term demand at these higher beef prices.
