Grains end higher on Friday and for the week, cattle and hogs were lower.
Grains See Technical Buying
Oliver Sloup, Blue Line Futures, says corn, soybeans and wheat all saw technical buying this week after bouncing off key support on the charts.
He says with the government shutdown the void of information is allowing the technicals to have a bigger influence on the markets.
Corn Closes Strong
Corn futures closed higher for a 4th session which is impressive considering the headwind of a massive corn harvest.
December did close above several key moving average resistance areas on Thursday and again on Friday according to Sloup.
However, the next technical objectives for the market include the $4.32 1/4 gap area left on July 7 that served as overhead resistance on the last rally.
What is the Catalyst That Helps Corn Break Above Resistance?
Sloup says if soybeans can continue to rally that will certainly help corn but confirmation of stronger demand or lower yields will help.
Soybeans Trade China Hopes, Stronger Brazil Soybean Basis
Soybean futures got some help this week from easing tensions between the U.S. and China.
However, rising basis levels for soybeans in Brazil has China halting their purchases.
U.S. soybeans are now cheaper than Brazil and while that may not attract China buying yet, it will be attractive for other customers around the world.
That helped to firm up U.S. soybean basis this week and Sloup is hopeful this is what continues to keep soybeans above the $10 mark on the futures.
Lack of Farmer Selling
He says the lack of farmer selling in the soybean market now that harvest is wrapping up is also part of the strength.
Many producers are storing beans this year and waiting for better prices and processors and the like are having to increase their bids to procure inventory.
Wheat Signaling a Bottom Technically?
The two classes of winter wheat bounced off contract and five year lows this week to finally post a higher weekly close.
While some of that was tied to short covering, Sloup thinks the charts may be signaling some type of bottom.
Cattle Futures Melt Down on Trump Plan to Lower Beef Prices
Live and feeder cattle futures gapped lower on the open and several of the feeder cattle contracts were locked limit down most of the session and will see expanded limits on Monday.
Sloup says the funds were liquidating long positions on the open Friday after President Donald Trump said the administration was working on a plan to lower beef prices. Some of it was triggered by algorithm trades that key their formulas off headlines but he thinks the selling could continue on Monday.
While there have been several key reversals in the cattle futures that have been negated, Sloup thinks this one is different.
“The government is working against the market now in their fight against inflation and managed money traders will likely see that as a trigger to take profits and get out of their long positions because they don’t want to fight against the government,” he says.
Cattle Futures Ignore Higher Cash
Cattle futures totally ignored the higher fed cash trade on Friday.
In the North live sales developed at $240, up $5 and dressed mostly $372, up $9 from last week’s weighted average in Nebraska. Southern live deals were at $240, $5 higher (basis Kansas).
When Will Lean Hog Futures Quit Going Down?
Lean hog futures have had a wicked correction from the contract highs and hit new lows for the move again on Friday.
Funds have been liquidating a record long position and Sloup thinks the correction may continue with support on the charts $2 below the current market.
Will Gold Hit $5000?
The precious metal market has also been on fire recently with talk of gold hitting $5,000 yet in 2025 and Sloup says technically it looks like it is possible.
However, he says the global race to this safe haven commodity is also driving the buying interest and that will likely continue under the current geopolitical climate.
