Soybeans and cattle ended higher Wednesday, with a mostly lower day in corn, wheat and hogs.
Matt Bennett, AgMarket.Net, says soybeans rallied with the tailwind continued talk of Chinese tensions easing.
President Donald Trump said the current 145% tariffs on China “will come down substantially, but it won’t be zero.”
Treasury Secretary Scott Bessent said earlier on Tuesday he believes a trade deal with Beijing can be reached. He reportedly stated that the current standoff with China is unsustainable, and that he expects the situation to de-escalate soon.
As a result, May soybeans finally closed above the 200-day moving average, a chart area that has been tested several times recently with no successful close over that mark.
So, does that open the door for a test of $11?
Bennett thinks it is possible if the China trade war gets resolved and with the push of even lower acres than the USDA Prospective Plantings Report suggested due to the fast planting pace of corn.
Corn planting sat at 12% nationally on Sunday which was ahead of average and has fueled talk of additional corn acres above the 95.3 million in the March report.
Corn has also been down four sessions as wheat has served as an anchor and with a stronger dollar Wednesday.
Plus, he says corn is seeing pressure from a recovery in the dollar after contact lows and liquidation tied to the expiration of May options on Friday.
Option expiration is also weighing on wheat as well as forecasts for much needed rain in the hard red winter wheat production areas and with the fast spring wheat planting pace at 17% in USDA’s Crop Progress Report.
He is hopeful wheat can avoid a retest of contract lows.
Cattle ended sharply higher with live cattle hitting new contract highs.
It follows the huge recover in the S&P and other outside markets the last two days.
The stock market has surged on the more favorable China trade comments but also as President Trump has said he is not going to fire Fed Chair Jerome Powell.
Cash trade was also higher last week and there are ideas of strong prices again this week, which is also pulling up the futures.
Is a double top forming or is the live cattle market going to take the next leg higher?
Bennett says it is still too early to tell and he could make arguments either way.
