Cash cattle trade started to pick up yesterday, the bulk of it coming in near 113 in KS & TX. The market managed to rally on the back of this news as market participants seemed relieved that it wasn’t lower.
May corn futures continued to drift lower yesterday and the technical landscape has gone from bad to worse over the past few sessions
Live cattle futures were nearly limit down on Friday and nearly limit up on Monday, as mentioned in yesterday’s report and in our interview with RFD-TV, the outside markets will be the driver of price action in the near term.
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.
May cocoa futures continue to move lower as fear grows that the coronavirus outbreak could continue to get worse. Until a vaccine is in place, which could be six weeks away, the threat of a growing number of cases will continue.
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.