Grain markets are slightly lower in overnight trade, with soybean meal being the exception. Traders may see another day of noncommercial selling and fund liquidation ahead of Wednesday’s all important USDA reports. One has to wonder just how much these numbers could move the markets if there is a surprise figure from USDA? With how tight stocks are, especially on soybeans, it could mean a dramatic and volatile price swing one way or another.
China’s Dalian exchange showed May corn down 0.9%, May soybeans down 1.6%, May soybean meal down 0.6% and May soybean oil down 0.7%. July common wheat on China’s Zhengzhou exchange was unchanged. June Malaysian palm oil is trading down 4.1%.
June and August live cattle futures pushed to new highs Monday as traders believe higher cash is on the way for this week. It will be interesting to see how early cash cattle will trade due to it being a holiday-shortened week. It will also be interesting to see how traders will react as the first quarter ends on Wednesday. Many times, funds may lighten up on positions in order to make the books look better for the quarter. However, with higher cash and strong boxed beef prices looking to dominate the week, they may see no need to take profits and then have to buy back in again. It seems like the trend has turned higher now that new highs have been established. The Commitment of Traders for the week ended March 23 showed funds net sellers of 4,005 futures contracts. This did trim net-long positions held by funds to 79,555 contracts. This will likely turn higher again on next week’s report due to what took place in the market last week.
Hog futures were bound to close the price gaps left on the charts on Friday. They did it in one massive swoop Monday with futures falling nearly $2.00 in some contracts before the selling pressure subsided and futures were able to recover quite a bit of their losses. Cash was a little higher and cutouts gained further ground. That does not paint a bearish picture for the week. However, it is the end of the quarter and could follow a pattern of funds lightening up on long positions to make the books look better. The Commitment of Traders report did not show any fear of a sustained price decline as funds added 262 net-long positions, bringing their total net-long positions to 76,095.
Farm and Ranch Director Jesse Allen has the update: https://lightningstream.com/ajax/GetODFile.ashx?call=MIDWEST&fileid=650