Grain Markets Rip & Livestock Dip

Grain and Oilseeds Wrap Up

Corn prices slipped early but would rally ahead of the noon hour as weather premium comes back into the market. The December contract is quickly approaching a cluster of resistance that sits within the $4.65 to $4.75 area, where several moving averages converge. The approach of the $4.70 area offers a spot to lighten long exposure, as we’ve all seen several summer weather rallies fall apart quickly. Hot and dry conditions will need to remain the theme to keep upside momentum going.

November soybeans challenged $12.00 in the overnight session before slipping into negative territory for a little while once the daytime trade session kicked off. The market would regain strength late to again knock on the door to $12.00 as hot and dry concerns and a confirmed purchase of US beans from a state-owned Chinese purchase add support. Hedgers should be looking for opportunities to get defensive on another move above $12.00 unless weather threats continue.

The wheat markets were pulled to small gains thanks to late-day strength for row crop prices. The December Kansas City contract still has room to continue its latest upside move to the $6.80 area, while we see room for the December Chicago contract to move closer to $6.50 before hitting next major resistance.

Cattle

August live cattle extended their downside move to a fresh low set today near $237, leaving prices within just a few dollars of major support. Today’s losses put futures prices below 100-day moving average support that sits near $239.60. The market hasn’t fallen drastically below the 100-day moving average for several months and that should catch the attention of those with a bullish bias. The cash market has slipped from $260 to $255 recently, but still holds a wide premium to the futures market. Look for support to surface soon.

August feeders ended another choppy session near even as support holds for now at its 100-day moving average around $359.50. November feeders fell more than $1.00 today and it looks like the market will spend some time south of $350 again. Prices are $15 to $20 off recent highs and we imagine pullbacks will keep buyers active in a market that still has bullish fundamentals in place.

Hogs

August hogs took on losses of as much as $2.00 after failing to push past short-term resistance within the $98 to $99 area over the past several sessions. The sideways trend in pork cutout values and weaker than normal cash markets has made it difficult for hogs to follow normal seasonal strength, which typically gives futures prices a stronger tone this time of year. An uptrend is still intact but the lower end of that uptrend is being challenged within the $96.00 to $96.50 zone.

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