Wheat futures have been hit hard over the last several weeks, but have low prices cured low prices?
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Transcript: Oliver with blue line futures and all of her that is abysmal is that cotton export number was, it was a whole lot better for wheat.
A whole lot better indeed for Wheat, my golly, didn’t the wheat market needed after the roller coaster that we’ve been on, we hit 23 week highs for weekly export sales about 24 and a half million bushel. So the wheat market has been under an immense amount of pressure over the last three weeks. So nice to see a silver lining and some buying step back into the market. Here in today’s trade, hopefully we can get some follow through into the last trading day of the week, the month and the quarter. Prices are basically right back to where we were in March 560. That’s where buyers showed up earlier in the year. So potentially, this is where they step back in as the old saying goes, you know, low prices cure low prices. We saw that in export sales this morning. So hopefully we can keep the ball rolling from here and start a new month and a new quarter on strong footing for the wheat market and potentially, in corn and beans if we can just kind of to through the rest of this week, which we all know we had that big USDA report tomorrow afternoon. You know, I think it’s interesting. If you go to China, the only kind of movie you can’t make in China is one that involves time travel, we can’t time travel to Saturday and get past this report. So what are you watching specifically?
Well, this report is historically a market moving report the impact with some surprises and certainly some volatility. And that can be illustrated by the cmec Vol index where we see high volatility in corn and soybeans, particularly, I don’t know what we’re gonna get. Unfortunately, I can’t time travel had mentioned. But one thing I wouldn’t be looking for is the potential for a negative report having a friendly reaction. I think they’ve taken a lot off of these great markets here over the last couple of weeks. And I think it would be encouraging to actually see a bearish report with a bullish reaction. That would be what we would refer to as a fundamental rejection, meaning if they can’t, you know, take the market lower on bearish news, potentially all that bearish news is already baked into the cake. So that’s just something we’re keeping an eye on. I don’t know if it’s going to play out like that. But I think that would be something that we’d be looking for as a potential outcome following tomorrow’s report.
Yeah, I love that you brought that up. We’ve already seen that happen. This week with the crude market, West Texas Intermediate gets some really negative news. And what do we do we shake it off and move higher.
And bring back Oliver Sloup Blue Line futures all over, I just wonder if the weekly box beef moving lower had any impact on the cattle market?
Yeah, they may have. We had a nice group higher yesterday and cattle and just couldn’t really find much follow through and today’s trade, which is a little bit of a disappointment. But if you zoom out and look at where prices are, we’re still seeing live cattle futures trade at their highest level since October. So the market is still you know, in a bull trend. And I think that’s encouraging. We’ve seen recent move higher over the last couple of weeks, as the future is trying to play catch up with the cash market, which has been absolutely resilient and someone maybe even go as far as calling it on fire and a lot of talk of the cash market and having a lot more upside potential and at the end of the year, and I think you know, one of the things that have maybe kept the futures market a little bit more muted is the potential risk, headline risk with regards to bird flu and the consumers potentially slowing down. But we have not gotten a ton of bird flu headlines recently. And the economic data that we got this morning wasn’t all that unfriendly either. So maybe that’s what we need is just no new news on that front to get these these managed money funds back participating in the livestock market.
You know, there’s so much money we keep hearing on the sidelines, just a matter of when we’ll see that move back in.
Yeah, and potentially what happens when we get through this month and this quarter again, if we can avoid those negative headlines with regards to the bird flu and consumer slowing down, that funds really have a very neutral net long position according to the commitment of traders report looking at historical data. So if we can avoid those headlines in the cash market remains firm. I wouldn’t be surprised to see them start adding to their length end of the third quarter. Okay Oliver, great to have you. We’ll talk to talk to you again soon. Oliver Sloup Blue Line futures