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Grain prices end the day mixed | Wednesday, June 15, 2022

July corn was up 6 cents while December corn was nearly unchanged. July soybeans were down a nickel, and November was down 2 cents. CBOT wheat was unchanged. KC was down 9 cents and spring wheat was down 7 cents at the close. Corn and soybean charts are trading between major moving averages while all three classes of wheat are below moving average support. 

Private firms have started and will continue to release their estimates for the month-end planted acreage report. Today we saw IHS Markit release its projections: corn acres increased by 455,000 acres while soybeans fell 280,000 acres.

Livestock futures managed to close in positive territory today. August feeder cattle were up $1.97, June live cattle were up $2.35 and July lean hogs were up $1.65.

Big news from the Federal Reserve Board today was the increase in short-term interest rates by ¾ of a point. The market was looking for ½ to a ¾ point increase, so this move was mostly expected. This is the biggest rate hike since 1994. The Fed did lower its expectations for U.S. economic growth by 1.1% vs the March estimate. The expectation of a ½- to ¾-point increase at the July meeting was also mentioned. 

One factor to realize is that the last time inflation was this high (over 8%), we were dealing with double-digit interest rates. Many traders recognize we could see the Fed increase rates quite substantially from current levels. 

The U.S. dollar lost steam after the Federal Reserve board's announcement. Late session trading put the dollar at 104.66 down 0.68 points.

Crude oil continued to slide the post-Fed announcement. Late in the day, crude was down over $3 as futures were under the $116 mark. The stock market reacted positively after the dust settled this afternoon. The S&P futures were up 1.2%, and the Dow Jones futures were up nearly 1%.

MIDDAY COMMENTS: 12:10 P.M.

July corn futures are 7 cents higher while December is up 2. The December contract found solid resistance at the Monday high, which coincides closely with the 50-day average today. If the corn bulls are going to mount a rally ahead of the three day weekend, they will need to post a convincing move through this resistance and etch a solid close. 

Soybean prices are quietly mixed at mid-day. The July contract did push over the $17 mark briefly but has since backed off to steady on the day. November futures are up a nickel near the $15.30 mark. The key price to watch for today is the 20-day average at $15.32. A close over this line would briefly give the bulls a shot of momentum. If the bears take control and make new lows, the next level of support is the 50-day average at $15.09. 

Wheat futures are mixed after a softer start to the day. CBOT is up 1, KC is down a nickel and spring wheat is still down a dime. All three classes of wheat have made lower lows than last week. The next major level of support in the wheat market is the June 1 low. Below those lows, we are likely headed to the early May lows. 

Livestock prices are mostly higher at mid-day. Feeder cattle are up $2.20, live cattle are up $3.02. Lean hogs are up 65 cents in July and down 20 in August.

The dollar index has climbed back to nearly steady on the day. Crude oil has drifted lower throughout the trading day. July crude is down $1.32 at $117.61. July RBOB gasoline briefly broke below the $4 mark today, which is more than 30 cents off the high hit four days ago. Key level to watch today in the July RBOB is $3.96 as that is the 20-day average. 

OPENING COMMENTS: 9:10 A.M.

Corn prices are trying to turn the tides and push into higher territory this morning.

July and December contracts are bouncing above and below the steady mark. July soybeans are down 3 cents, and November is up 3 cents. CBOT wheat is a dime off the low but is still down 3 cents. KC and spring wheat are both down 10 cents.

Livestock prices jolted higher right out of the gates this morning. August feeder cattle are up $1.82. June live cattle are up $2.55, and July lean hogs are up $1.05. The June live cattle contract gapped higher on the chart and is at the highest level in nearly two months. 

The U.S. dollar index is quietly lower this morning after pushing to the 105.47 mark yesterday. Last trade on the dollar is 105.12, which is down 0.21.

Crude oil futures are weaker again this morning, following the late session selling seen on Tuesday. July crude is down 70 cents at $118.23. There should be strong support for crude at $116.62 (yesterdays low) and $115.85 (20-day average). If prices slip through these levels and close below them, the bears could quickly pick up momentum to the downside. 

Traders are going to closely watch the Federal Reserve board rate decision today. The market is expecting to see a ½ point increase today. Some traders would not be shocked to see a ¾ point hike given the recent economic data. 

For a free trial of The Kluis Report including three times a day market updates and the Saturday newsletter, visit kluiscommodities.com, call 888-345-2855, or email info@kluiscommodityadvisors.com

About the Author: Bob Linneman is a commodities broker with Kluis Commodity Advisors. Linneman grew up on a diverse farm in eastern South Dakota. Between milking cows, managing a beef herd, and farming various crops, he experienced many aspects of agriculture firsthand. After graduating from North Dakota State University with a degree in business, he moved to Hawaii with his wife. There he was an associate portfolio manager for a fixed income firm that managed $2 billion in assets. After nearly two years in Hawaii, he moved back to the Midwest and began his career in commodities. Linneman is licensed as a Series 3 and Series 30 commodity broker.

Editor’s Note: The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance – whether actual or indicated by simulated historical tests of strategies – is not indicative of future results. Trading advice reflects good-faith judgment at a specific time and is subject to change without notice. There is no guarantee the advice given will result in profitable trades.

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