Grains close mixed Thursday, livestock mostly higher.
Chip Nellinger, Blue Reef Agri-Marketing, says soybeans ended with nearly 23 cent gains in the January contract on the heels of new highs for the move in the soybean oil market, which has been following new highs in palm oil.
The rally was also a function of spread unwinding with corn and solid weekly exports.
There was also some market talk about China looking for more soybeans ahead of possible tariffs from the Trump Administration.
“There was some rumors there about China back in the market trying to buy more soybeans for the December time slot, but no confirmation of that,” he says.
He says he’s been surprised with the ability of the soybean complex to discount the tariff concerns and rally more than 40 cents off the lows election night.
“I think the soybean market got caught a leaning too hard on the short side ahead of the election,” he says.
Nellinger is cautious about the move with better weather in Brazil and a monster soybean crop in the works.
Corn was up only a penny on the day and unable to follow soybeans, which was disappointing with strong weekly exports of 109 million bushels.
Nellinger says that market saw a pick up in farmer selling that coincided with some stronger cash basis levels.
Corn also saw profit taking on spreads with soybeans and a lower wheat market was a drag.
Wheat futures saw technical selling and better rains in Hard Red Winter wheat areas weigh on the market.
However, there was also positoning ahead of the Fed decision, which resulted in a quarter point drop in interest rates.
Nellinger thinks the Fed might be done lowering rates through the balance of 2024.
Grains saw some positioning as well before Friday’s WASDE.
Nellinger is only expecting just slight revisions on corn and soybean yields in the November report which will result in only minor changes in production and ending stocks.
The one exception could be corn where demand has been outpacing USDA’s projections for both ethanol and exports.
Cattle and hogs ended mostly higher Thursday with a push from the lower interest rates and despite market year low exports for both beef and pork.
Nellinger says there may be some inflationary buying starting to take place in the ag sector, including meats.
