May soybean futures saw a choppy and volatile trade in the back half of last week as market participants try to grapple with the effects of coronavirus. Friday’s Commitment of Traders report showed funds bought 14,634 contracts, trimming their net short position to 75,130.
The S&P has now lost more than 500 points and 15% from its fresh record last Thursday. Yesterday’s failure to hold 3050 into the close was a sure sign of more pain to come, something we voiced here in our Technical section.
April live cattle tried to stage a relief rally early yesterday morning but failed miserably to hold a flame. Futures continued lower into the close, making new lows for the move and coming within arm’s length of the contract lows from September.
Soybeans got hit hard yesterday, trading to their lowest price since May. The spread of coronavirus has given the funds ammunition to add to their growing net short position.
April lean hogs fell victim to the spillover effect from the outside market turmoil but managed to hold their own better than we had anticipated. If outside markets can find their footing and stabilize at the least, we think there is an opportunity in the near term.
The U.S. Dollar continues to be trading near multi-month highs which is throwing a wet blanket on grain markets. The risk-off trade created by the spread of coronavirus has and will continue to affect near term money flow in commodities, including corn.
The USDA’s Ag Forum had corn acres at 94 million acres, far from friendly but short of apocalyptic. The USDA’s Prospective Plantings report will be out next month and hold a little more weight.
April live cattle traded on both sides of unchanged before finishing yesterday’s session in positive territory. The market ran up against our technical resistance pocket but failed to chew through it,
Soybeans have seen a choppy overnight session, trading both sides of unchanged. Phase-1 is officially underway, a silver lining. The bulls will want to see a weekly export business increase in the coming weeks as verification that Phase-1 holds more hope and not just hot air.
March corn futures slipped lower yesterday but remain trapped within the range amid the time of year that offers a lack of news to break the market out or down.
