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Grain futures stay under pressure through the close | Thursday, June 23, 2022

July corn ended the day down 21 cents while December was down 38 cents. The close in both July and December corn was roughly a dime off the intraday low. July and November soybeans were down nearly 60 cents on the day. The selling pressure seen overnight picked up momentum throughout the day session. Both July and November contracts closed under the 100-day average today, which could be a reason for the increased selling pressure seen throughout the day. The last time we closed under this moving average was mid-December.

Wheat futures were also lower today. CBOT wheat was down 39 cents, which put prices at the lowest level since early March. KC wheat was down 33 cents on the day and is getting very close to testing the March 29 low. Spring wheat was down 25 cents today and closed decidedly below the 100-day average on the July contract. 

Livestock prices remained mixed into the close on Thursday. August feeder cattle were $1.70 higher. June live cattle were down 87 cents while July lean hogs were down $3.30. 

The outside markets were mixed. The U.S. dollar index was up 0.12 points at 104.10. Crude oil was down $2 in late afternoon trading, while the U.S. stock futures were up 36 points in the S&P and up 175 points in the Dow Jones. RBOB gasoline futures bounced off the 50-day average yesterday and were able to post a higher high and higher low today on the charts. If prices close below that moving average, we could see the momentum traders join the bear camp. 

Grain futures in the red at midday: 11:45 a.m.

July corn is down 19 cents, which is 15 cents off the low. December corn is down 38 cents, which is a dime off the low. July soybeans are down 61 cents near the lows of the day, while November is also down 61 cents. Wheat futures are lower across all three exchanges. CBOT wheat is down 25 cents, KC is down 26 cents and spring wheat is down 18 cents. 

The intense selling over the past few days is likely a combination of long liquidation and seasonal selling pressure. Traders will continue to digest the estimates ahead of the big month-end Planted Acreage and Quarterly Stocks reports. Weather forecasts still have the potential to change momentum in the grain markets as the late planting window this spring has pushed back the normal pollination window for corn across the Midwest.

Livestock futures are mixed. August feeder cattle are up 95 cents. Live cattle are down 80 cents in June, and lean hogs are down $2.72 in June. Live cattle came close to testing the 20-day average for support today. A close below this line would likely give the bears enough momentum to push toward the June 13 low. 

The U.S. dollar index continues to consolidate inside the range from last week. Crude oil failed to surpass the 20-day average this morning, which gave the bears the momentum to push prices lower. August crude is down $1.90 but has not made a lower low than yesterday. Equity markets did not breach the high from yesterday, which likely caused some bulls to move to the sideline briefly. 

Fund liquidation continues this morning: 8:45 a.m.

Although the fund liquidation is continuing this morning, U.S. and global vegetable oil prices are trading higher, with palm oil futures turning higher in Asia and now soybean oil price trading higher in the U.S. After a rough start, U.S. stock prices are also higher.

July corn is down 21 cents. December corn is down 21 cents. July soybeans are trading 33 cents lower, and November soybeans are down 31 cents. Wheat futures are down 19 to 24 cents.  

The key to watch today is if the overnight lows in soybean oil can hold. 

In outside markets, crude oil is up 47 cents per barrel. The U.S. stock market is higher with the Dow up 151 points.

In the livestock markets, August hogs are down $1.35 at  $1087.17. August cattle are up 45 cents at $135.37, and August feeders are $1.80 higher at $174.90.
 

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: Al Kluis has been a commodity advisor and broker since 1976. Kluis is an introducing broker with Wedbush Futures and writes a column, Your Profit, which appears in every issue of Successful Farming magazine. Kluis has published two books on commodities trading and is commonly quoted in major publications including the Wall Street Journal. He is also a featured speaker at commodity conferences nationwide. Kluis is a frequent market analyst for the Linder Farm Radio News Network. A Minnesota farm boy, Kluis was awarded his degree in ag economics from the University of Minnesota in 1974, after which he was executive director of the Minnesota Soybean Association before entering the markets full-time. His family still farms in southwest Minnesota, and Kluis enjoys helping with fieldwork when the markets allow.

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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