Grains tanked on Thursday. Livestock close higher except live cattle.
Don Roose U.S. Commodities says grains were under pressure due to a number of factors including technical selling, a lack of bullish news and the higher dollar.
He says soybean made new contract lows with mostly favorable weather in South America, record crop prospects in Brazil, plus China and Brazil inking a new trade deal this week.
Brazil has been getting good rains and Argentina is also forecast to get some rains starting this weekend in some of the drier areas.
Soybean oil was also sharply lower along with soybean meal which weighed on soybeans.
Roose says soybeans had been holding together recently with the strength in the veg oil markets but that has given way and so have bean prices.
He also explains Friday is option expiration for December soybean oil, meal, corn and wheat and so there is generally liquidation and loss of open interest ahead of that event.
The dollar made new highs for the move and scored a technical breakout which is bearish for all agricultural exports he says and makes the U.S. less competitive especially compared to the Brazilian Real.
All of that over shadowed solid weekly exports for all of the grains Thursday morning and another 12.3 million bu. of flash export sales of soybeans to China and unknown and 133,000 metric tons of soybean meal to the Philippines.
Yet, Roose says cash basis levels remain positive for soybeans and especially corn and the forward spreads would also indicate strong demand by end users and a lack of farmer selling.
The wheat market had been adding war premium earlier in the week and ran into chart resistance and saw some profit taking.
He says live cattle also fell on profit taking and caution ahead of the Cattle on Feed, plus seasonal demand weakness and competition which is not unsual around Thanksgiving.
Cash has been light at $290 dressed in the North, steady with last week. Some light $187 paid by a regional packer.
Meanwhile, feeder futures ended higher continuing to be pushed by strong cash and tighter numbers.
Lean hog futures shook off the higher dollar to trade higher with the funds long and the futures at a discount to the cash index.
