GRAINS:
Most agricultural commodity markets were moderately lower Wednesday as the trade seems largely to be ignoring fundamental clues, bullish or bearish, in favor of cautious technical trade ahead of new USDA numbers early next week. Outside market influence was mainly positive Wednesday with a weaker U.S. dollar as well higher equity markets. Weather in South America remains friendly and uneventful, with a few private analysts now penciling Brazilian production above the USDA’s record estimate of 169 million metric tons (mmt). We will see what USDA has to say on the matter next week, but at this point an increase in Brazilian production would feel like further condemnation of the U.S. soybean export book as with these world supplies and a shaky relationship with China it gets difficult to see a significant foothold for the U.S. in the world marketplace. March corn closed down 2 1/4 cents and May corn was down 2 1/2 cents. January soybeans closed down 8 cents and March soybeans were down 7 1/2 cents. March KC wheat closed up 3/4 cents, March Chicago wheat was up 3/4 cents and March Minneapolis wheat was down 1/2 cent.
LIVESTOCK:
The livestock complex hit a bit of a speed bump midweek as traders want to see more fundamental support develop before they can confidently advance the contracts. Traders seem to be tapping their toes and holding their breath as they wait for this week’s cash cattle trade to develop. At this point the futures complex is idle, trading slightly lower as traders need to see what’s going to develop fundamentally this week in the fed cattle sector. It was impressive that feedlot managers were able to get cattle traded for $3.00 to $5.00 higher last week, and it’s assumed that cattle will trade steady to somewhat higher again this week. If feedlot managers don’t get offered the money they’re hopeful to see, it’s likely that they’ll just roll this week’s showlist over to next week as they’re current enough in their inventory to do so. The lean hog complex is yet again sinking lower as the market simply isn’t receiving the fundamental support it needs in order to confidently trade higher. Given that most of the nearby contracts are up against resistance levels — and in some contract’s cases — up against the contract’s lifetime high, traders desperately need more fundamental reassurance if they’re going to be able to push the technical side of the market any higher. And given that that support hasn’t come to fruition, a lower trend isn’t unexpected.
