Corn futures finish day high | June 16, 2022
Corn futures traded at the highest levels in nearly a month today. July pushed over the $7.90 mark while December was able to briefly trade over $7.40.
Enthusiasm today could partly be tied to the House of Representatives' approval of a bill that would allow year-round use of E15 fuel. How this will impact ethanol demand is yet to be determined.
Soybean futures were able to pop over the 20-day average during trade. By the close, prices had backed off to settle on or very near the 20-day. A strong move over this line tomorrow could trigger further buying ahead of the long weekend. Even though the daily soybean charts posted higher highs and higher lows today, the momentum indicators still favor the bears.
CBOT wheat was able to rebound nicely today after a rough few days. The close was above the prior two-day high, which is helping sway the momentum toward the bull camp. July CBOT wheat was up 29¢, KC was up 15¢, and spring wheat was up 8¢.
The outside markets remained under pressure this afternoon with the exception of crude oil. The U.S. dollar is down 1.42 points at 103.52. The S&P futures are down 3.4% and the Dow futures are down 2.4%.
MID-MORNING COMMENTS: 11 A.M.
Grain prices are strong at mid-day in the face of a meltdown in the outside markets. July corn is up 13¢, December corn is up 15¢, July soybeans are up 15¢, and November soybeans are up 19¢.
Wheat prices have also shot higher today. CBOT is up 29¢, KC is up 18¢, and spring wheat is up 9¢.
Weather forecasts are being monitored closely as we approach the three-day weekend. With the slow start to the planting season this year, traders know there is very little room for crop stress this year.
Livestock futures are mixed. August feeder cattle are down $2.10, live cattle are up 25¢ in June and down 70 cents in August. Lean hogs are up $1.30 in July.
The outside markets are being hit hard with selling pressure today. The U.S. dollar index is down 1.45 at 103.46. Minor support should be found at 103.35. Crude oil has managed to reverse the big losses sustained this morning and is now trading $1.05 higher at $116.36. S&P 500 futures are down 3% and the Dow Jones futures are down 2.2%.
Equity traders seem to be running for the exit door as many signs are pointing to a recession in the United States. If the U.S. is headed for a recession, then we are likely to see other countries across the globe enter recession status as well.
MORNING COMMENTS: 9 A.M.
Grain prices are moving higher this morning. July corn is up 9¢, December corn is up 14¢, July soybeans are up 11¢, and November soybeans are up 12¢. Wheat is also moving higher this morning, as all three classes of wheat are up 11¢. Export sales were disappointing for corn and wheat, while the soybean numbers were close to expectations.
Traders are positioning ahead of the three-day holiday weekend. Expect volatility as we approach the month-end report and see continued changes to the weather models.
The mid-range forecast released yesterday is suggesting above-normal temperatures for the last half of July through early September combined with below-average moisture. These forecasts are likely to change, but the impact on prices is happening now.
Russia and Ukraine's weather is trending dry on top of the long list of problems they are already dealing with. Traders will have to revisit the availability of Ukrainian grain to the world in the near future.
Livestock futures are mixed. Feeder cattle are giving back some of the gains from yesterday, with prices down $1.40. Live cattle are quietly mixed this morning, as traders are surely watching the strength in the corn market. Lean hogs are 17¢ higher in July and 60¢ higher in August.
The outside markets are under pressure. The U.S. dollar index is down 0.60 points at 104.33, crude oil is down $2.46 at $112.85, S&P 500 futures are down 103 points (2.7%) and the Dow Jones futures are down 655 points (2.1%) at 29,996. On the continuation chart of the Dow Jones, this is the lowest we have traded since early February 2021.
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.
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