Corn ends higher on extended weather forecasts with concerns that the change to hot and dry conditions will hurt the crop says Randy Martinson, Martinson Ag.
“The forecast is calling for a high-pressure ridge or at least hotter conditions for at least a majority of the Corn Belt region and I think that came in to help support the corn. With the wet conditions that we’ve had the corn doesn’t have much of a root structure. If we get into some really hot temperatures, we could start to see the crop deteriorate fairly quick.”
Plus, strong export inspections of 52.7 million bushels continue to show good demand for U.S. corn and he thinks USDA may revise demand upward in the WASDE.
Corn held chart support on Friday, but Monday was stopped technically as the July contract ran up into the 100-day moving average and could not take it out. “We’re going to need some news to push us through that,” he adds.
Soybeans got a push from the meal market on the threat of a strike in Argentina and a revision upward in the NOPA crush figure from April. “Plus, with the weather it looks like now we’re going to get the crops planted and may not see an increase in soybean acres,” he says.
He says it was impressive considering the collapse in wheat which was down the 9th day and made new lows for the move. He says it was a trifecta in the wheat futures with continued harvest pressure and better than expected yields, rains in the Black Sea and the higher dollar.
Martinson says technical damage was done to the charts after Monday’s action as all three classes of wheat have taken out the 50% retracement levels.
The markets are gearing up for the USDA report on Wednesday and he expects higher supplies of wheat. USDA won’t adjust yields or acreage for the row crops so the adjustment there will come from demand and Martinson says corn demand could increase, soybeans could decrease.
He isn’t anticipating much change in South American production as USDA has been slow to follow Conab’s lower estimates.
Live and feeder cattle futures had a nice rally on fund or technical buying plus the market may be anticipating strong cash this week as sales continued to improve into late Friday and numbers of market ready cattle are tight. “Retailers are going to start featuring for July 4th,” he adds.
Hogs struggled again as demand is lackluster and the futures have only been able to achieve small short covering rallies to date.
