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Grain prices end the week softer | Friday, June 17, 2022

Corn and soybeans were unable to hold the gains seen earlier in the day as the selling pressure in wheat intensified after the June 1 lows were breached. July corn was down 4 cents as was December corn. July soybeans were down 7 cents, and November was down 6 cents. 

Wheat was hit hard today after the bulls were unable to pierce the Thursday high. July CBOT came within 3 cents of the June 1 low today and settled down 44 cents, about a nickel away from June 1 level of major support. KC wheat ended the day down 43 cents, which was below the June 1 low. Spring wheat was down 39 cents and also closed below the June 1 low. Momentum indicators for all three classes of wheat are deeply oversold. 

Livestock futures ended the week on a high note. August feeder cattle were up $1.70 and near the top end of the range for the week. June live cattle were up 27 cents at the close today. Live cattle are trading at the highest levels since mid-April. July lean hogs settled up $1.30 on the day, which was slightly higher than the 50-day average. Momentum indicators are trying to turn bullish in the lean hogs. 

The aggressive selloff in crude oil continued to gain steam throughout the day. At the lows, August crude was down $8.85 to $106.40. The July contract is still the lead month until Tuesday, June 21. Prices did bounce off of the 50-day average almost to the penny. Prices have only closed below the 50-day once since December 23. The daily chart for crude oil does not look good for the bulls as today was a big outside day (trading range was above and below the prior day) with a close below the prior two-week low.

August RBOB gasoline settled the week at $3.68, which is 44 cents off the high hit on June 10. If the bears break to new lows early next week, the next major level of support is the 50-day average near $3.50. How long will it take for the pumps to reflect the decline in prices seen over the last week?

MIDDAY COMMENTS: 11:35 A.M.

July corn is up a nickel while December is up 7 cents. July corn hit the $8 mark today but was unable to break through. December corn fell just short of the $7.50 mark so far today. 

July soybeans are up 2 cents, and November is up 8 cents. July was looking strong this morning as prices had broken through the 20-day average and were gaining momentum. Prices have since backed off and are trading near the 20-day. The soybean bulls need to get a strong close over this moving average if they are going to attract new buyers to the bean market. Worth noting: Soybean oil has been sliding lower since last Wednesday. July soybean oil is at the lowest level since April 13. 

Wheat prices are lower at midday. July CBOT wheat got within a penny of the Thursday high then sellers stepped in. July CBOT is down 29 cents and has made a lower low than yesterday. KC wheat is down 23 cents, and spring wheat is down 25 cents.

Livestock futures are stronger at midday. August feeder cattle are up $1.87. June live cattle are up 45 cents, and July lean hogs are up $1.17.

The big story in the outside markets is the washout happening in crude oil. July crude is down $7.05 at $110.54. Interesting to note that the low today is within 15 cents of the 50% retracement line drawn from the May 11 low and the June 14 high. RBOB gasoline is also down nearly 25 cents today, which is a 50 cent decline since the high hit last Friday.

OPENING COMMENTS: 9:05 A.M.

July corn is up a nickel while December corn is up a dime. July soybeans are up 3 cents this morning, but that is 12 cents off the overnight high. November is up a nickel, trading just off the $15.50 mark.

The USDA announced export sales of nearly 145,000 metric tons of new crop corn to Costa Rica and 105,000 metric tons of old crop corn to unknown.

Wheat futures were quietly higher overnight but have turned quietly lower after the opening bell this morning. CBOT wheat is down 2 cents. KC wheat is down 4 cents, and spring wheat is down 8 cents. Wheat traders are watching the forecasts in the areas of France and Spain where wheat is grown. They are dealing with a heatwave that has temperatures pushing over the 100 degree mark for consecutive days with no rain. 

Livestock futures are higher this morning. August feeder cattle are up 47 cents, June live cattle are up 22 cents and  July lean hogs are up $1.32. 

The equity markets are recovering some of the losses sustained on Thursday. The US dollar is up 1.05 points at 104.47. The S&P futures are up 36 points while the Dow Jones futures are up 215 points. 

Energy prices are down this morning. July crude oil is down $3.31 at $114.28. Key level to watch today for crude oil is the low hit yesterday at $112.31. If the bears push to new lows on the week, we will likely see another wave of selling pressure before the holiday weekend.

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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