By: NATHAN STUEDLE
GRAINS:
Corn futures were higher, with trade pressing back toward the next level of nearby resistance with flat to soft spread action in a quiet session into the break. Ethanol margins are seeing a little pressure from corn gains as unleaded remains at the lower end of the range. Basis will likely remain steady to softer into the holiday weeks.
Soybean futures were higher, with meal leading the product complex heading into the break as we continue to ease oversold conditions. South American weather looks to remain mostly good into the end of the months with key growing areas in the best shape. Basis will likely remain soft into the end of the year.
Wheat futures were higher, with winter wheats leading again as KC pushes back past nearby resistance this morning and Chicago gets closer to testing its resistance as well. Southern Hemisphere harvest will start heading to the homestretch soon. Weather for the Plains looks to cool a little from the weekend with short term moisture remaining limited. On the KC March chart, support is the 20-day moving average at $5.23, which we are consolidating above, with resistance the Upper Bollinger Band at $5.40.
LIVESTOCK:
The live cattle complex is traded mostly lower into Wednesday's closing bell as traders had mostly checked out ahead of the holiday. And with the market's 100-day moving average still remaining a barrier, which the complex has yet to be able to challenge, a lower trend is most likely to remain the market's theme through the week's end. A few bids are currently on the table in the fed cash cattle market, but nothing sizeable has developed following Tuesday's light trade. On Tuesday, there was some light trade noted in the North at $356 to $357, which is steady to $1.00 lower than last week's weighted average, and some Southern live cattle traded at $229, which is $2.00 higher than last week's weighted average. Some light clean up trade could happen between now and Friday, but this week's trade isn't expected to amount to much.
While the live cattle complex traded mostly lower, the feeder cattle contracts moved the opposite direction of the live cattle market and traded mostly higher for the bulk of the session but faded to end narrowly mixed into the day's closing bell. It's quite impressive that the feeder cattle complex has been able to maintain its position above the market's 100-day moving average without much support from the live cattle complex.
The lean hog complex was again trading lower into Wednesday's close, after seeing the Quarterly Hogs and Pigs report, and with the holiday sluggishness setting in. It's likely that the market will look for reassurance fundamentally again before it challenges the resistance at $90.00.