Grains start higher overnight with wheat gapping higher on the open and making new highs for the move.
Randy Martinson, Martinson Ag says wheat was reacting to cuts to Russian and Black Sea production.
IKAR cut production another 2 million metric tons to 81.5 mmt and SovEcon also lowered their crop estimate 3.6 mmt to 82.1 mmt due to continued drought. Ukraine production was also lowered by 2.9 mmt to 19.1 million.
However, he says wheat is well off highs in early trading as the U.S. market has also been following Matif wheat which made a new 1 year high overnight and then saw some profit taking.
Corn and soybeans are lower after hitting resistance on the charts and seeing some farmer selling again.
Martinson also thinks soybeans are trading the possibility of higher acres due to planting delays after a wet weekend and forecast for portions of the corn belt. Plus, the lack of confirmation of last week’s rumored China old crop soybean export business is negative.
The lower soybean and soybean meal markets are also pulling down corn. Even with export business to Mexico and growing concerns about replant and prevent plant, there are some in the trade showing caution due to the planting pace in recent crop progress reports.
Live and feeder cattle futures start higher digesting the Cattle on Feed Report which was in line with expectations but still contained bullish numbers. The on feed number was down 1% from a year ago, placements were 6% lower and marketings were up 10%.
The market brushed off news USDA had found H5N1 fragments in beef tested for the virus. The market was helped by last week’s cash trade which was at record levels in the North and futures remaining at a discount.
However, Martinson says prices are again approaching chart resistance and it is end of the month, plus there are concerns about holiday beef clearance with the severe weather and rain in many areas of the country.
Lean hogs make new lows for the move and take out another layer of chart support triggering more fund selling.
