Corn is making new contract lows again with liquidation ahead of first notice day for March contracts and lower Brazil corn prices. Allison Thompson, with The Money Farm, says there was a massive amount of farmer selling last week going into March option expiration on Friday. She is hopeful that will start to take some pressure off the market. However, funds are record short in corn now at over 340,000 contracts and have been content to keep pushing the market lower as they are trend followers.
Soybeans made new contract lows and then tried to bounce on corrective buying early in the session as the market is oversold. Funds are short in this market as well nearly 137,000 contracts and extended that position last week. AgRural came out with another lower Brazil soybean estimate of 147.7 million metric tons but according to Thompson, “The market has really failed to take off on these lower private estimates.”
Wheat was weak early but is trying to bounce. Thompson says both Chicago and Kansas City wheat posted higher weekly closes last week and has been trying to divorce itself from corn and soybeans. So, she thinks the market may be trying to forge a bottom and could possibly lead the row crops higher at some point. Spring wheat is starting to show a favorable price ratio compared to soybeans in the northern corn belt and so it may try to bid some acres back. Plus, the carry in the deferred wheat contract is starting to erode which Thompson says is an indication of improved demand, which would be welcome.
Profit taking hits cattle after higher-than-expected placements came in the COF report. However, Thompson says the reaction has been mild and the market was due for a correction so she doesn’t expect the market to stay down for long.
