Corn and soybeans end lower with wheat mixed on Friday. Cattle end lower, hogs higher.
Allison Thompson with The Money Farm, says it was a lower week in the grains with the exception of spring wheat.
There were a combination of factors that drove the market lower including technical selling.
However, one of the leading fundamentals that triggered the fund selling was weather.
Weather looks to bring heat (80’s) into the Midwest followed by better chances of moisture and a return to (70’s) and moisture as the “trough” moves east pushing out the wet weather in the East and maybe a return to normal moisture all in the 10-day forecast.
Trade uncertainty also weighed on the markets.
Wednesday an International Trade Commission (ITC) panel ruled the “Liberation Day” tariffs imposed by the Trump Administration were illegal, but an appeals court is allowing the levies to stay in place through the 10-day waiting period for a court hearng.
There were also reports form the administration that talks between the U.S. and China had stalled, and President Donald Trump said China had violated an agreement with the U.S. to mutually roll back tariffs and trade restrictions for critical minerals and promised to get tougher on Beijing, which also weighed on the soy complex.
Spring wheat was the only market higher for the week with July up 18 cents on the poor initial crop conditions at 45% good to excellent, which is the lowest in 37 years.
Thompson says spring wheat technically is running up to resistance on the charts around $6.50, but the funds are short and if they push the market through that level the rally could have legs.
Spring wheat helped to hold up the winter wheat classes but the question is whether or not a rally can be sustained as winter wheat harvest has started and there will be increasing hedge pressure.
Cattle futures set back in the face of the explosion higher in the cash market with cash in the North as high as $235 and in the South up to $223.
She says it was end of the month and there was likely some profit taking by the funds who have made a great deal of money in the market.
The futures are at a substantial discount to the cash but even with that she think the funds are nervous about pushing the long side of the market too far due to fears about New World Screwworm entering the U.S.
