Corn:
Dec corn up 2 3/4 as weekend social media filled with photos of crop quality problems in the wet areas of the Midwest, raising ideas USDA trims yield in Friday’s October WASDE. The Brazilian real jumped to a new contract high against the dollar after the election headed to a runoff, which typically makes Brazilian farmers less aggressive sellers. COT showed the fund net long at a 5 week low, but Wednesday’s heavy selling missed the Tuesday cutoff: strong support sits below 490, with hedge selling likely on a move toward 515.
Soybeans:
Nov beans up 10 3/4 on the Brazilian real’s surge after Bolsonaro’s strong showing forced a runoff with Lula, plus photos of moldy beans circulating from the rain soaked belt. Managed money cut its net long 9% to just over 241,000 contracts, still historically very large, and China remains on holiday through Thursday. Breaks should find support into Friday’s WASDE on yield cut potential, but rallies are tough to extend without China: resistance 1299 then 1311.
Wheat:
Dec Chicago wheat up 11 3/4 after Russia said it will intensify strikes on Kiev, hitting a grain ship at Odessa port and striking a key Kiev bridge twice over the weekend. Saudi Arabia bought 683,000 tonnes in its international tender, and COT showed the Chicago fund net short at a 6 week high with the KC net long cut 26%. With the bearish news priced in, the path of least resistance turns higher: above last week’s 700 high opens 718 and possibly 731, the 50% retracement.
Livestock:
Dec live cattle pulled back sharply Friday led by feeder weakness, but the bulls keep the edge with COT showing funds adding 9% to the live cattle net long and 10% in feeders: above the September highs at 225.42 triggers more aggressive technical buying, pullback support up to 220.15. Slaughter rebounded to 548,000 head, one of the largest weeks of the year as packing plant labor problems improved, and cash held mostly steady a 3rd straight week at 220 to 222 north and 226 south. Dec hogs closed Friday near the highs with the fund short extended 24% to a record just over 44,000 contracts: that is buying fuel off oversold conditions, and above 71.62 the covering gets much more aggressive, resistance 70.80 then 71.15.
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