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Grain prices close higher | Wednesday, May 11, 2022

Grain prices were higher today in another low-volume day of trade ahead of the USDA May Supply/Demand reports. The weather today looks wetter in the updated models, especially for the northern Corn Belt. The weather forecast and inflation buying lifted the prices on the CBOT and Minneapolis wheat market with Minneapolis wheat rallying to new contract highs.    

At the close July corn closed up 13¢, with December up 16¾¢. July soybeans closed 14¢ higher with November soybeans up 17¢.

July CBOT wheat closed up 20¢, KC wheat closed up 25¢, and Minneapolis wheat closed up 35¢. 

Tomorrow at 11 a.m. the USDA will release its monthly Supply/Demand reports. The trade is expecting the USDA to show smaller crops and a reduction in ending stocks. If you look at the history of the May report, be careful: The USDA rarely makes changes in the May report. As always, the reaction to the report is more important than what the report actually says.

Livestock futures closed mixed on Wednesday. June Hogs closed down 72¢ at $100.85, June Cattle closed up $1.17 at $133.57, and August Feeders closed down $1.85 at $170.00. 

In the outside markets, crude oil is up $5.50 per barrel. The stock market was higher early in the day, but at this hour all of the major indexes have turned lower. 

MID-MORNING COMMENTS: 11 A.M.

The grain markets were steady to lower overnight and have now turned higher with Minneapolis wheat posting new contract highs.

At this time, July corn is up 11¢, with December up 12¢. July soybean futures are now 13¢ higher with November soybeans up 18¢. July CBOT wheat is up 15¢, KC wheat is up 19¢, and Minneapolis wheat is now up 23¢. 

The key chart price levels that need to hold are $7.80 on nearby corn and $15.80 for July soybean futures. Those levels were tested on Monday and Tuesday and now prices are working higher to test the top end of the trading channel. It is worth noting that May corn and soybeans are trading at a large premium to the July contract as we approach the last trading day on Friday.

The weather forecasts seem to change every day and today the models look wet for late this week and into next week, especially for the northwest Corn Belt. 

In the outside markets, crude oil has turned sharply higher and is now up $5.80 per barrel at midday. The U.S. stock market was hit early in the day but is now higher on all of the major indexes.  

MORNING COMMENTS: 9 A.M.

In the early grain trade – after starting out steady to lower – July Corn is now up 14¢, July soybeans are trading 20¢ higher, and wheat futures are 12¢ to 16¢ higher. 

For the week May corn is up 10¢, May soybeans are down 3¢, and wheat futures are 3¢ to 8¢ higher. 

The stock market has been very volatile day-to-day, but if you now look at the weekly chart, the Dow is down 500 points or about 1.5%

The Bureau of Labor Statistics Inflation report today showed inflation at 8.3%, compared to 8.5% last month. This suggests to me the Fed will keep pushing short-term interest rates higher. After the release of the inflation report, the U.S. dollar turned higher, the stock market sold off, and is now up 180 points on the Dow. 

The updated weather forecast this morning is for warm, mainly dry conditions across most of the Corn Belt, while the northern Plains stay wet in the six- to 10- and 11- to 15-day forecasts. It’s more bad news for farmers in northern South Dakota and North Dakota. As one frustrated farmer from North Dakota told me yesterday, if it stops raining tomorrow, he will not get in the fields for 10 days. “Time to talk to my crop insurance lady.” 

Livestock futures closed mixed today. June Hogs are down $1.02 at $100.57, June Cattle are up $1.02 at $133.45, and August Feeders closed down $1.02 at $170.82.

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.

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