Another lower day in most of the grain markets with new lows again in soybeans. Hogs also fell, while cattle bounced.
Tomm Pfitzenmaier, Summit Commodity Brokerage, says soybeans suffered from report hangover as the market is still pricing in the 25% increase in ending stocks.
However, soybeans also saw pressure from strong crop ratings and nearly ideal weather for the rest of August.
“This may be giving traders the idea that yield and production will continue to rise in soybeans and push ending stocks closer to that 600 million bushel mark,” he adds.
The funds are also at a near record short position in soybeans and they continue to sell.
“As far as where the bottom could be, people have their eye on $9.50 on the new crop November contract as key support and we ended only about 12 cents above that. Some of my technical indicators did turn back up here just at the close today, so I guess we’ll see if we can catch a little bounce,” he adds.
While China came in for 4.85 million bushels of new crop export business, he thinks they will continue to make only token purchases.
Those same factors weighed on the corn market as well and the market followed soybeans, which negated the key reversal from Monday.
He says there isn’t a lot friendly for corn as farmers tell him they could have one of the biggest crops they have ever raised.
Plus, he says farmer selling picked up in old crop corn after the higher close Monday especially with excess inventory yet to sell before harvest.
Wheat was mostly lower even with a softer dollar as demand is still slow, despite cheap prices.
Plus, he says lower corn and soybean prices were also a drag on that market.
Live and feeder cattle futures bounced with lower corn and higher boxed beef values at noon, but can the market build on it?
He fears it might just be another opportunity for funds to sell and liquidate more of their long position in live cattle.
“The cattle market got hit when the stock market broke and we put a low in the October live cattle at $176. Now we’ve bounced nicely off of that but now we’re up against resistance in the $182 and we need to get above that to keep moving higher.” he explains.
Plus, there is still a lot of uncertainty about the economy and consumer demand if the U.S. does go into a recession.
Lean hog futures continued their downtrend following lower cash and a lower Lean Hog Index for a 6th day.
