Wheat is higher for a 7th day on technical buying and continued fund short covering, plus U.S. and global production concerns.
Allison Thompson of The Money Farm says winter wheat crop conditions have deteriorated in the U.S. Hard Red Winter wheat belt but there are also production issues in parts of Europe, Russia and Ukraine and even Canada that are gaining market attention.
She says the market is also watching rain chances in the extended forecast for the HRW wheat areas of the Southern Plains. If those don’t materialize the market may continue to add weather premium.
Corn and soybeans are nearing some chart resistance which may be why those markets are seeing light pressure. Thompson says those markets have been rangebound and so she is watching key resistance areas that need to be taken out to sustain a rally.
She says, “I think May corn needs to take out the recent high of $4.48 to keep moving higher for December corn that chart area is $4.79.”
Thompson says the rain falling in dry areas of the Western Corn Belt may also be a little bearish for the row crops even if it does slow down planting efforts. Plus, its too early for the market to get excited about planting delays due to too much rain she adds.
Export demand may be the sleeper fundamental for the corn market according to Thompson as weekly exports are above last year. “Some in the trade are expecting USDA to raise exports in the May WASDE and so that could help support a rally.”
She adds that Brazil’s second crop corn is also entering a key filling stage with hotter drier weather and that could cut yields plus Argentina has already seen lower estimates due to leafhopper problems. “While that isn’t a driving market factor yet it definitely bears watching,”
Meanwhile weaker exports and falling veg oil prices have hurt the soybeans. Plus, that market has also run up into chart resistance this week on the upper end of its trading range.
Cattle continue to rally after Thursday’s reversal on steady to higher cash.
