Row crops ended lower on Friday with wheat, cattle and hogs to the plus side.
New crop corn and soybeans continue to crack out new contract lows.
Oliver Sloup, Blue Line Futures, says the markets are preparing for higher yields in the August WASDE as he doesn’t think USDA will adjust acreage much.
“The average analyst estimates comes in right at 182.1 bushels per acre for corn and 52.6 bushels for soybeans and those are some pretty lofty numbers to meet. It kind of makes me think and question how high is the bar set and is it set too high? I guess that’s too be determined right?”
He says past years have presented more variability and crop concerns but this year there is a lot of good crop out there.
So a lot of the bearishness may be priced into the markets.
“So are the expectations set so high that it’s tough to meet them and that could leave some potential disppointment?” he ponders.
Sloup was disappointed that better export news failed to support soybeans including Thursday’s strong new crop weekly exports and several flash sales on Friday which finally confirmed speculated China business.
“If you can’t rally the market on good news that’s always a caution flag in my opinion,” he points out.
He thinks the soybean market needs more consistent demand and export business to support prices.
Sloup says at least Soft Red Winter wheat looks like its trying to bottom but all classes ended higher on Friday perhaps pricing in global production concerns.
“Wheat was a bright spot the last week and it looks like it’s trying to carve out a little bit of a low. Look at the technicals on that December Chicago contract that $5.75 to $5.80 area has been a big inflection point for the market, tested it Friday morning and couldn’t get out above that resistance,” he adds.
Live and feeder cattle futures staged a huge relief rally but can the market build on it?
Sloup is concerned with the amount of fund long liquidation that has taken place in the market.
While Sloup says lean hog futures ended mostly higher Friday except expiring August, but are choppy and range bound looking for direction.
