To hear Ken’s recap of the day’s trade with analyst Don Roose, click here.
WEST DES MOINES, Iowa – Fund buying supports both the corn and soybean markets as cattle and hogs hit contract highs. Today’s analyst is U.S. Commodities, Inc. founder Don Roose.
Corn
The corn market continues to push higher. What we have is seasonally we have a lot of fund buying coming into the corn market, the soybean market, and the wheat market. You know it’s that time of year where funds are trying to get ahead of the seasonals from a weather standpoint. So, fund buying, technical buying, and farmer movement continues as we move up, though.
Soybeans
The soybean trade continues to be all about the Chinese demand. The trade continues to look for somewhere around 70 to 90 million bushels of soybeans to be rolled forward from this year purchases to next year purchases, but as we continue to move through week by week, the big cancellations or “roll-forwards” aren’t occurring. The market here remains tight in the U.S., so the driving force is that the funds continue to push the market higher.
Cattle
The cattle trade – a big trade today. We’ve got a push to all-time highs on the cattle driven by the fact that we’re in some of our tightest numbers that we’re going to have for the year right now because of the lower placements that we had, accordingly. The boxed beef is also starting to push higher. The wholesaler’s starting to stockpile for a seasonal move higher as we go forward, so it’s all about the contract highs – more fund buying coming into the market as we advance forward.
Hogs
The big thing that we have on hogs – very similar to cattle – we moved into contract highs again. The big question continues to be: we’ve added a big PED virus premium to the hog market; the trade continues to believe we’re going to see the slaughter start to taper back here soon, and that that’s going to continue to push us higher and we’re going to achieve some of these premiums in the market.
Meantime, the weights are historically higher than normal and that’s kind of keeping a cap on some of the cash rally, but the cash market continues to move higher here in anticipation of trying to reach some of these premiums in the future.
