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Wheat futures close sharply higher | Wednesday, May 4, 2022

Wheat futures were very strong today. Corn closed mostly higher with soybeans, on a late rally, closing higher.

July corn closed 1¢ higher today at $7.94. December corn closed up 1¢ at $7.36. July soybean futures closed up 10¢ at $16.40, while the November contract closed 8¢ higher. Wheat futures closed sharply higher with CBOT wheat closing up 31¢. KC wheat up 30¢, and Minneapolis July up 26¢.

For the week, nearby corn is now 20¢ lower than last Friday. Nearby soybeans are down 38¢ lower, and wheat futures are 12¢ to 22¢ higher.

In the outside markets, the U.S. dollar closed sharply lower. Crude oil is up $5.67 per barrel, and the stock market moved sharply higher into the close with the Dow up 861 points.

In the livestock markets, June hogs closed up $2.90 at $105.10. June Cattle closed down 50¢ at $134.82, and August feeders closed down 7¢ at $176.20. 

This afternoon the Federal Reserve announced a .5% interest rate hike, and the guidance going forward was not as hawkish as feared. This announcement rallied the stock market and dropped the U.S. dollar. I think it is good for the markets to just have this day behind us. 

Midday Comments: 11:30 a.m.

Wheat prices have managed to hold onto early gains. Corn futures have traded on both sides, with soybeans higher on the old and lower on the new. What I am describing is a choppy day of trade. Even when prices were down on the lows at about 10 a.m., the bull spreads were working. We will wait and see what the Fed announces later today. 

The American Petroleum Institute report released today was positive for energy prices showing a drawdown in crude oil, gasoline, and diesel inventories. Ethanol production this week was reported at 969,000 barrels per day up 6,000 barrels per day from last week. Ethanol inventories dropped 3,000 barrels in the last week.  

When it comes to energy prices, I do not like paying more for gas, but the strong energy markets and ethanol prices are helping corn futures move higher.  

At this time, July corn is up 4¢, with December down 2¢, July soybeans are now 8¢ higher with November soybeans up 1¢. July CBOT wheat is 34¢ higher; KC wheat is up 31¢, and Minneapolis wheat is up 28¢. The key to watch into the close is that prices close higher, and that the bull spreads keep working in corn and soybeans.

In the outside markets, crude oil is up $4.10 per barrel early today, and the stock market is now lower after a higher start.   

Opening Comments: 9 a.m.

The grain markets turned higher at about 5:30 a.m. this morning when India announced it would restrict wheat exports as record heat takes a toll on the 2022 wheat crop. Wheat prices shot higher, pulling corn and soybeans higher as well. 

The other news out this morning is minimal. Tomorrow is the USDA Export Sales report. I will be closely watching wheat exports to see if high prices, the high U.S. dollar, and increased shipping costs again result in disappointing wheat exports. 

At this time, July corn is up 3¢. For the first time in 10 sessions, December 2022 corn is unchanged. July soybeans are up 4¢, with November up 1¢. Wheat futures are 15¢ to 36¢ higher.

There is still hope. I talked with a long-time customer who farms in southeast Minnesota this morning. The last two years he finished planting corn at the end of April. His yields both years were 206 bushels per acre. In 2018, he was done planting corn on May 10, and his yields that year were 230 bushels per acre. “We have a lot of this crop year to go. At least I have plenty of subsoil moisture now in the bank,” he told me.

In the outside markets, crude oil is up $4.40 per barrel. The U.S. stock market is higher, and livestock futures are mixed.  

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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