Grain and livestock markets close mixed on Tuesday.
Wheat continued to rally with KC and CH closing above key resistance and making new highs for the move on technical buying and ongoing global crop concerns.
Will wheat take the next leg higher?
John Heinberg, Total Farm Marketing, says the key will be follow through buying in Wednesday’s session.
“The late price action today kind of tells us that maybe the money still wants to push this market a little bit. Closing above that recent low that we put in last week when we reversed this market, just about poking through the $7 handle on Chicago wheat, getting about that $7 on Kansas City wheat, those are some big technical barriers. So, I think Wednesday’s trade could be very very key. You know can we get through that window and actually climb past it?”
Heinberg says it’s reasonable to expect there are a lot of sell orders setting above the $7 level in July Chicago wheat and it’s also a big psychological resistance area to get through.
“We’ll continue to watch the newswires for news about Russia, obviously they are the largest exporter, and they are having issues with their crop and those prices are on the climb. That’s going to lift everybody’s wheat price including the U.S.,” he says.
Corn and soybeans could not follow and consolidated with better-than-expected planting progress.
“We saw a big jump in corn plantings, a solid jump in soybean planting. In fact, soybeans are tracking about 3% ahead of the five-year average, corn is still down about 1% from the five-year. I am still watching that planting pace in Iowa and Illinois your two largest corn planting states because they are still trailing behind the average and have seen a lot of rain the last few days,” he says.
Corn and soybeans also had a consolidative day technically he says.
Cattle closed above chart resistance working in higher cash and cutouts. “You know we trade $2, $3, $4 higher last week but that’s all being driven by that boxed beef price. Choice cutouts closed in on $314 at noon and that’s the highest levels since March. Obviously, that’s tied to the Memorial Day featuring,” he says. He thinks that will support the cash market.
Hogs struggle technically with the futures premium to the Lean Hog Index which was slightly lower. However, the Juen futures are at least still holding the 200-day moving average.
And Class 3 Milk Futures posted a limit down day after that market has recovered nearly $5/cwt off the April lows. What was the cause?
Heinberg says a drop in cheese prices weighed on milk futures as blocks and barrels were down 5 to 6-cents.
