Grain and cattle markets are mostly higher Tuesday.
Allison Thompson with The Money Farm says corn and soybeans bounced off chart support and are seeing technical buying and some fund short covering.
However, the recovery is also tied to strong end user buyer with another 14.2 million bushels of corn sold to Mexico.
Cash basis levels have been firming for corn and soybeans where harvest is starting to wrap up and the forward spreads have also been indicating underlying demand according to Thompson.
Soybean traders are also watching the ongoing stimulus efforts in China with hopes of demand in the future.
Again this week they announced a 25 basis point interest rate cut along with a host of other measures to support the economy.
Wheat is trying to follow but Thompson says continues to struggle with improving weather in the wheat areas of the U.S. and Black Sea.
Russia is still the big wild card as the ag ministry has suggested a minimum floor price of $250/ton FOB and that is lifting world values but she says the jury is still out on whether it will curb their wheat exports or not.
Early private estimates for Russia’s 2025-26 crop are in the 80 to 85 million metric ton range due to dryness.
Thompson says there are however strong protein premiums for high quality Hard Red Spring wheat and she thinks that domestic milling demand will provide an opportunity for wheat producers to price wheat down the road.
Cattle futures recover early but keep running into chart resistance.
Thompson says the bulls need those technical areas to be taken out to keep buying but may need some fresh news to make that happen as they have already priced in the strong cash and cutouts.
