Wheat ends higher and posts new high closes with Chicago finally above $7, on the back of lower Russian wheat estimates.
However, the U.S. market has been following Matif wheat which posted a one-year high Monday and then ended a bit lower on Tuesday.
So, can wheat keep moving higher?
DuWayne Bosse, Bolt Marketing, says, “The trend is higher, I’ve been fighting it. I keep thinking this whole wheat rally is something that needs to be sold and it eventually pulls back. I keep looking for a top in this market because we’re overdone,” he says.
Bosse thinks the market may have seen some farmer selling but may have also priced in the current news and will need a bigger crop problem to continue to push much higher.
“If the Russian wheat crop fell to below 80 million metric tons, then you could see the market rally another at least 50 to 75-cents, that’s probably what it takes for these funds to go long the wheat market. I think you’ve done a really good job of getting them out of short positions but going long and being bullish U.S. wheat is a whole different thing,” he says.
Soybeans fall hitting chart resistance and with the lack of confirmation of last week’s old crop soybean export buys by China. “This $12.50 area has been kind of a tough point to get up and over,” he says.
Bosse adds the wet weather was driving some talk of acres being switched from corn to soybeans.
Corn did not follow wheat, but instead soybeans. The market was not concerned with any planting delays or switching of acres. “I think USDA was too high with its total principal crop acres, so I am not sure we see lower corn acreage,” he points out.
In fact, it looks like funds are pushing the short side of the market again. “The funds sold another 40,000 contracts as of last Tuesday,” he adds.
Yet, Bosse, who farms in Northeast South Dakota says he is concerned about getting all his corn planted as the recent rains haven’t provided a break to make any progress.
Live and feeder cattle futures made new highs for the move with a push from a positive Cattle on Feed Report, record high cash in the North and higher cutouts. Can they keep moving higher to take out the March highs?
“All systems point higher in the cattle especially with the tight supplies especially calves. The only thing I don’t like about the cattle market is how nice everything is lined up here but if I look at June and August live cattle the discount is too big and I expect cash to be up again,” he says.
Lean hog futures make near term lows and June closes below $94 support, so there may be more downside risk. “I would have probably told you $8 or $9 ago that we were at the lows, but this feels like one of these snowballs that just keeps going on,” he says.
