Row Crops Fall on Weather with Funds Still Short: When Will That Change? And are Cattle Forming a Low?
Markets Now Closing Markets 4-16-24 Video
Corn and soybeans slide with rains falling in some dry areas of the corn belt and more in the forecast.
Matt Bennett, AgMarket.Net also says row crops reacted to USDA's crop progress report showing planting is ahead of average at 3% on soybeans nationally and 6% on corn.
"A lot of planters are rolling; people are posting stuff. Anytime that you see that much activity I think you're going to see a little bit of pressure early on. Typically, the thought process is the earlier type planting window is going to translate into really good yield potential."
Bennett says the grain markets are also suffering from a lack of buying enthusiasm. A lot of commodities have rallied lately but the ag markets have struggled.
Funds continue to stay short in grains heading into the uncertainty of the growing season, but could anything change that?
Bennett says its unusual for funds to be near record short this time of year. However, he says it has to do with the larger ending stocks of soybeans and especially corn.
"It's all fundamentals Michelle. Whenever you look at corn, even if you take 50 million bushels out of the corn balance sheet in the U.S. that only gets you down to a 2.122-billion-bushel carryover. It's still over 2.0 billion bushels," he says.
So, Bennett thinks the only things that can turn the trend are a major weather problem with heat and dryness in the second crop corn in Brazil. Or there could be some money flow that comes into the grains if the equities continue to slip.
Wheat ended mixed on crop conditions. Winter wheat ratings were at 55% good to excellent, down 1%. However, states like Illinois which are SRW wheat areas were up 13%, while HRW wheat in Kansas declined 6%.
Cattle futures extended gains for a second day hopefully putting HPAI in the rear-view mirror.
Bennett thinks the correction was also prompted by funds taking profits after the market recovery in the first quarter of 2024.
"They ran them up. You got into the high $180s and then I think you had funds say maybe we have made enough money for the time being and dumped a few of those longs and it looks like right now you've stabilized," he says.
