Grains end lower again on Tuesday seeing more fund selling pressure on the lack of news and the lack of a weather threat.
November soybeans were down 18 1/4 cents, December corn lost 7 1/4 cents closing at $4.05 and right on chart support, while September Hard Red Winter wheat fell 3 1/4, Soft Red Spring wheat and Hard Red Spring wheat both lost 7 cents.
Allison Thompson with The Money Farm says last week’s recovery rally in grains fell apart in about 48 hours.
“We gave all that weather premium back and then some,” she adds.
The change in the weather forecast which put rain into the prime areas of the Corn Belt started the selloff on Friday and its been a downhill slide since then, especially for soybeans.
Crop ratings are also historically high for this time of year she adds and record yields are still on the table.
USDA pegged the corn crop at 68% good to excellent up 1% from last week and is up from the 55% rating last year.
Soybeans are at 67% good to excellent, down just 1% verses 52% a year ago.
Technically corn and soybeans had inside days.
“Today November soybeans held Monday’s low of $10.18 so that will be important support as well and December corn closed right on another chart support area at $4.05 and has also been holding the old contract low of $4.03,” she explains.
However, the funds are short and in control and Thompson says they could continue to add to those positions without a reason to change course.
Thompson warns the selloff in grains could get even uglier if November soybeans take out $10 and December corn takes out $4.
She doesn’t think that will happen until after the WASDE as the market is trading higher yields and will need confirmation of that from USDA.
Thompson also expects some offset from lower acreage tied to flooding, hail and even some prevent plant.
Soft and Hard Red Winter wheats made contract lows and Minneapolis came within a cent but Thompson expects more pressure in wheat as spring wheat harvest is starting to roll and until the U.S. gets competitive enough to spur export demand.
She is keeping an eye on global wheat production issues in the Black Sea and Canada.
Meanwhile cattle rebounded from a lower day Monday with higher boxed beef values and last week’s higher cash.
