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Soybean futures hit new contract highs | Wednesday, June 8, 2022

The corn and soybean markets continued to rally today with soybean futures hitting new contract highs. Several factors are creating this rally. First is the rumor of large corn and soybean sales to China. Second is the large fund buying by investors that are seeking an inflation hedge. Third, end users are buying because of the hot weather forecasts. Wheat futures managed to close higher on a late rally.

July corn had an 18 cent trading range and closed 7 cents higher today at $7.64. December corn closed up 4 cents at $7.18. July soybean futures closed up 12 cents at $17.40, while the November contract closed 18 cents higher at $15.68. Wheat futures closed higher with CBOT wheat closing up 3 cents. KC wheat closed up 6 cents, and Minneapolis wheat is up 7 cents.

No agreement was put together at the meeting with Russia and Turkey to allow a grain corridor from the Black Sea. Ukraine did not even attend the meeting. The failure so far to allow grain exports out of Ukraine was one of the bullish factors for the corn and wheat markets today.

So, I have to ask why buy it when you can steal it? Russian authorities have officially reported on Wednesday they are ready to load grain from Ukrainian ports that are currently occupied by Russian forces – including the heavily damaged Mariupol, and the port of Berdyansk, according to Russian media agency Interfax. A lot of this grain has been stolen from elevators in regions Russia troops control. 

In outside markets, the U.S. dollar is trading 20 ticks higher. Crude oil is up another $2.50 per barrel day. The stock market has turned lower with the Dow down 205 points at this hour.

The livestock markets closed mixed on Wednesday. June hogs closed down 50 cents at $107.85. June cattle closed up $3.10 at $136.82, and August feeders closed up $3.20 at $174.45.

MIDDAY COMMENTS: 11:10 A.M.

The corn market continues to move higher and soybean futures are rallying to new contract highs this morning. We continue to see a lot of fund-buying as rumors continue about large sales being made to China. The weather is going to turn hot starting next week, and no one can predict how long the hot, dry pattern will continue.

At this hour, July corn is up 10 cents. December corn is up 4 cents. July soybean futures are currently up 22 cents. November soybeans are 21 cents higher. Wheat futures are lower, with CBOT wheat down 2 cents. KC wheat is down 2 cents, and Minneapolis wheat is 1 cent lower.

For the week, July corn is up 40 cents. July soybeans are up 54 cents. July CBOT wheat is up 28 cents. July KC wheat is up 26 cents. July Minneapolis wheat is up 6 cents.

On my charts, the bull spreads keep working, which is a positive sign. The market is moving higher and is very orderly. I am watching to see if November soybeans can close above $15.70.

In the livestock market, June hogs are down 17 cents at $108.25. June cattle are up $2.57 at $136.30, and August feeders are up $2.15 at $174.60.

In outside markets, crude oil is up $1.93 per barrel. The U.S. stock market is slightly lower with the Dow down 90 points.

OPENING COMMENTS: 9:15 A.M.

The talks between Russia and Turkey did not bring any results last night, with the two countries blaming each other for the global grain shortage. This is was viewed as positive for the grain markets. Also, the extended forecasts are in agreement that a ridge will likely set up in late June and last into July. This ridge could potentially bring hot, dry conditions in that time period. 

After a lower start, grain prices are again higher, with soybeans rallying up to new contract highs. I have several chart patterns that I watch that suggest a potential high by the third week of June.

In the early grain trade after starting out lower July Corn is now up 5 cents. July soybeans are trading 28 cents higher, and wheat futures are 6 to 8 cents higher.

In outside markets, crude oil is now up 60 cents per barrel. The U.S. stock market has turned lower, and livestock futures are mixed. 

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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