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Grain markets close mostly lower in very volatile day of trade | Monday, May 2, 2022

The main negative factor today was improved weather with this week’s forecast warmer and drier than the models suggested late last week. We also had huge fund selling today.

July corn closed 10 cents lower today at $8.03 ½. December corn closed down 9 cents at $7.42 ¼. July soybean futures closed down 39 cents, while the November contract closed 24 cents lower. Wheat futures closed lower CBOT wheat was down ¼ cents, KC wheat down7 cents, and Minneapolis July up 2 cents.

The USDA Crop Progress report today showed corn plantings at 14%. This is way behind last year’s pace of 46% and the five-year average of 33%. Soybean planting advanced to 8% this compares to the five-year average at 13%. Spring wheat plantings advanced to 19%, this is 9% behind the five-year average. Winter wheat crop conditions were steady with last week at 27% good to excellent. This is down 21% from last year.

The really important benchmark to watch is the USDA Crop Progress report that will be released on Monday, May 9. Last year that report showed corn planting at 67% and the five-year average that week should be at 52%. Usually (but not every year), it is hard to get a trend line yield in the US if the corn crop is not at the 50% planted mark by May 10.

Livestock futures closed mixed on Monday. June Hogs closed down $1.40 at $104.97, June Cattle closed up $2.55 at $135.20 and May Feeders closed up $5.07 at $161.42.

In the outside markets crude oil has had over a $5 trading range and is up $1.01 per barrel. The stock market rallied back from sharply early losses with the Dow stock index having a nearly 800 point trading range and closing up 84 points. 

Midday Comments: 12 p.m.

After trading sharply lower in early trade, wheat is attempting to turn higher, while corn and soybeans are under pressure.  

Crude oil was down over $4.00 per barrel early today, and the stock market has once again turned lower. 

This afternoon the USDA will release its monthly Oilseed Crush report. The trade expects a record crush of 192.8 million bushels. The report is expected to show soybean oil stocks of 2.431 billion pounds. I am watching to see if the record-high price of soybean oil starts to slow demand. So far I have not found any demand destruction in the corn, soybean, or soybean products’ markets, but I am watching.

Two key things to watch on a day like this is where prices close and what the old- to new-crop spreads are doing.

July corn last trade is at $8.00 with key chart support now at the early low at $7.90. July soybeans last trade is down 34¾ at $16.50 with key support at the 10:30 low at $16.45. July CBOT wheat is nearly unchanged on the day with support at the early low at $10.34. Key support for July KC wheat is at $1081¾, and for Minneapolis July wheat futures support is at $11.54.

Opening Comments: 9 a.m.

Less rain than expected over the weekend, especially in Iowa and Illinois, along with a warmer, drier forecast for later this week put pressure on the grain markets last night.  

Many markets around the world are shut down today. The stock markets in Asia are not open until Thursday as they celebrate the Golden Week holiday. In Europe, the stock and commodity markets are closed today for the May Day Holiday.  

Now onto the war in Ukraine. Many news sources reported on Sunday that Russian troops in the occupied city of Melitopol have stolen all the equipment estimated to be worth $5 million from a John Deere dealership. They then shipped all the equipment by truck transport north into the Russian farm city of Chechnya. However, after a journey of more than 1,200 kilometers (700 miles), the Russian thieves were unable to start any of the equipment. The dealership was able to track the tractors (no pun intended). They then locked down and totally disabled the high-tech tractors remotely. If you see your local technician at the John Deere dealership, say thanks and make sure he is not kidnapped! This another example of how technology wins over brute strength.

Prices that started out lower in the early trade were hit hard one hour later. Now the key to watch between now and noon is if prices can take out the high or the low posted so far today. Because we are now in delivery on the May contract most of the trade volume has moved out to the July contract.

July corn trading range of 18¢ (note the high at $8.08½ and the low at $7.90½ with the last trade down 9¢ at $8.09. July CBOT soybeans showing a trading range of 41¢, (high at $16.88¾ low at $16.47) with futures now down 33¢ at $16.52. Wheat futures were lower and are now 5¢ to 7¢ higher.

In the outside markets crude oil is down $3.50 per barrel, the U.S. stock market is slightly higher, and livestock futures steady to lower. 

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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