Corn and soybeans end higher on Friday with fund short covering and soybeans reversing a lower start after the release of a record NOPA crush figure at 186.2 mb.
Chip Nellinger, Blue Reef Agri-Marketing, says the higher weekly close in soybeans likely confirmed a bottom as May was up 14 1/4 cents and November was 17 higher. Soybean oil was also up another 325 points this week.
The strong weekly close in soybeans have confirmed a low for Nellinger. He thinks the funds will continue to take profits off the table on their short positions heading into the end of month and quarter. “We are seeing some strong technical signals in the market as the futures move above some key moving averages and that may cause the funds to cover more of their short position especially heading into the uncertainty of the USDA reports and our planting season.”
However, Nellinger says South American weather, especially Brazil, will be the key the next few weeks for soybeans and second crop corn. “That will also determine how much higher U.S. corn and soybean prices can rally,” he says.
Corn was slightly lower for the week as May corn lost 3 cents and December 1 1/4 cents. Nellinger says corn continues to be held back by wheat and if wheat could bottom it would allow the corn to stage a decent rally but here too the low is likely in.
Wheat sank again Friday on technical selling and continues to digest cancellations of United States, Australia and French wheat. For the week May Chicago wheat lost over 9-cents, Kansas City fell 22-cents and Minneapolis 15 cents.
Cattle rebounded Friday and June live cattle were slightly higher for the week by 17-cents. Near to record high cash cattle trade supported the market. However, with the reversals on Thursday is the market signaling a top?
Nellinger says it may be too early to tell but he is watching the economic data to determine if demand can stay strong and the biggest key is cash. “If cash can continue to move higher, I think the cattle market still has some upside,” he says.
Meanwhile, crude oil close above $80 and may be seeing inflationary buying according to Nellinger. The market is also seeing a stronger seasonal and lower inventory is supportive.
