Grain and livestock futures are mixed early in the session Tuesday.
Winter wheat rallies early on global production concerns and fund buying.
DuWayne Bosse, Bolt Marketing, says IKAR lowered Russian production another 2 million metric tons to 83.5 mmt which supported additional buying. Spring wheat is seeing pressure from fast planting pace at 79%, which is 14% ahead of average.
He says he was surprised to see the strong fund buying Monday in wheat and across the grain complex as funds continued to cover short positions. “However, I don’t think funds will go long in the grain markets,” he says.
Technically many of the grain contracts are running up into chart resistance again.
July Kansas City wheat briefly got above $7 and July Chicago wheat made new highs for the move and then both pulled off those levels so the close will be important technically for the market to continue to see buying interest.
Corn tries to follow wheat with new export sales of nearly 9 million bushels to Mexico and Spain. However, Bosse says corn is held back by lower soybeans and planting progress coming in better than expected at 70%. Plus, the market ran back up into chart resistance.
He says soybeans and products are weak on corrective and farmer selling after the higher close Monday. Planting progress also came in better than expected at 52% nationally, which is still 3% ahead of the five-year average.
Cattle futures are higher with last week’s strong cash, the futures discount to that cash and weaker corn. Feeders were down on Monday so some of it is also corrective buying according to Bosse.
Meanwhile hogs are seeing pressure with lower cash and the futures premium to the Lean Hog Index. Bosse says that’s despite lower corn and meal and that market being oversold and due for a correction.
