Grains and livestock markets are mixed.
Darin Newsom, Sr. Market Analyst for Barchart says weekly grain export sales were decent this morning at 48.1 million bushels for corn, 46.5 million for soybeans and 15.9 million bushels for wheat.
Wheat is charging higher again seeing more fund short covering and adding some risk premium tied mostly to geopolitical concerns as war escalates in the Black Sea as Russian attacks target Ukrainian ports and vessels.
He says funds continue to cover their remaining short position in all three wheat classes and the bigger question is do they have a reason go long in wheat or any of the grains?
Right now he doesn’t see a catalyst.
Traders are watching U.S. and global weather in the grains, which continues to be dry for wheat areas but Newsom says the July new crop wheat contracts are not reflecting a real concern yet.
Meanwhile, soybeans are removing some weather premium with forecasted rains for Brazil but with the fast harvest pace and dry weather in the U.S. the market is also seeing harvest or hedge pressure.
Newsom says corn is rangebound waiting for new news and it has reached an equilibrium between big supplies and strong underlying demand.
This morning corn is seeing a bit of spillover weakness from the soybeans.
CPI data was out and at 2.4% it was slightly above expectations.
However, Newsom doesn’t think it will have much bearing on the stock market long term.
He does question how many traders want to buy the stock market at these high levels and believes it is due for a correction.
What will that mean for markets like cattle or even grains?
