Wheat BREAKS OUT While Corn Hits Key Target! What's Next With Heat Fading

Grain and Oilseeds Wrap Up

December corn hit losses of 6 to 7 cents late in the overnight session before spending most of Tuesday 2 to 3 cents lower. Strong resistance at $4.70 has so far stopped the latest rally and less heat in extended forecasts has a chance to limit fresh buying from current levels. Rallies to the $4.70 area look like a spot to get defensive while a pullback to $4.45 provides a spot to enter the long side again. 

Soybean prices bounced from early morning losses of 7 to 8 cents but failed to turn positive as buyers have so far been reluctant to stay engaged as the November contract approaches $12.00. Extended forecasts are backing off on extreme heat but the market might not back off drastically until rain hits the Midwest again. Expect choppy trade action around $12.00 until more is known about future weather impacts.

Wheat prices were quick to jump from overnight weakness and would reach dime gains later in the day. The December Chicago contract bounced after a challenge of its 50-day moving average that sits in the low-$6.40 area while December Kansas City wheat turned previous resistance at $6.80 into a support area. Falling U.S. supply levels and ongoing geopolitical issues are causing wheat to move against its normal seasonal trend. 

Cattle

The bleeding didn’t stop in the cattle markets today with live cattle taking on $3.00 losses while feeders slipped another $5.00 to $6.00. The August live cattle contract is down to a challenge of the 200-day moving average at $231.50 with a breach of that level likely prompting further fund liquidation. Ongoing weakness in the cash market and beef cutout values are keeping buyers sidelined for now. Prices are falling to oversold levels and are sitting at a steep discount to the cash market. We’re watching closely for buying opportunities.  

Hogs

August hogs traded a tight range before ending the day with small gains in front month contracts. The August contract is keeping an uptrend intact with support moving up to the 20-day moving average near $97.30 while overhead resistance has so far limited the rally to the $99 to $100 zone. Stronger cash market activity and gains in pork cutout values recently have lent support while deferred contracts have benefitted from a bit of a short squeeze as funds still maintain near record short positions. October hogs have room to slip to a challenge of their 20-day moving average near $82 and we’ll expect strong support is maintained from that level.  

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