Grains see early strength with strong new crop corn and soybean exports but then turn mixed with soybeans setting back.
Darin Newsom, with Barchart says the recent rally in the grains follows the seasonal patterns and while he admits there has been better demand surfacing from lower prices and weather may have been helpful, most of the push has been fund short covering.
“f we look at futures spreads for the short term new crop they are still neutral levels of calculated full commercial carry. So most of this has come from the non-commercial side buying back some of their large net short futures positions in all three markets.” he says.
Newsom also points to the long term bullish reversal pattern at the end of August in the December corn continuous monthly chart.
We didn’t get that in any of the other grains he says, “But we did get bullish weekly reversals in all of the grains across the board.”
He adds the markets are running into chart resistance and may be getting tired so they will need some new bullish news to keep going and get above these chart areas and that may be why there wasn’t a more positive reaction to the new crop corn and soybean exports.
Plus, thinks there may be some early harvest pressure heading into the weekend in soybeans, maybe even corn.
Crude oil tries to recover after dipping below $70 in most of the WTI contracts and is working on one of the worst week’s in a year, but what does that mean for the ag sector?
And payroll data was lower than expected and Newsom says he expects a rate cut in the September meeting, the question will be how much.
