Corn and soybeans close lower | Friday, May 6, 2022
Corn and soybeans closed lower on improved weather forecasts and fund liquidation. Lower global equity markets also put pressure on the grain markets.
July corn closed 13¢ lower today. December corn closed down 18¢. July soybean futures closed down 25¢, while the November contract closed 21¢ lower. Wheat futures were mixed on the close with CBOT wheat closing up 2¢, KC wheat down 6¢, and Minneapolis 1¢ lower.
For the week:
- Nearby corn futures closed 26¢ lower at $7.92. This compares with last year’s close this week at $7.40.
- Nearby soybean futures closed 53¢ lower at $16.55. This compares with last year’s close this week at $15.71.
- Nearby CBOT wheat futures closed up 53¢ at $10.97. This compares with last year’s close this week at $7.42.
- Nearby KCBT wheat futures closed up 65¢ at $11.59. This compares with last year’s close this week at $6.98.
- Nearby Minneapolis wheat futures closed 43¢ higher at $12.04. This compares with last year’s close this week at $7.63.
The U.S. dollar continued to rally this week closing up 85 points at 103.64. This is the highest close since 2017. With the current high U.S. corn and soybean futures price and the U.S. dollar trading at over 103 U.S., corn and soybean prices are at new all-time highs. We are already starting to see wheat exports suffer, and it is just a matter of time until it impacts our corn and soybean exports as well.
The key next week will be the U.S. Crop Progress report on Monday and what the global equity markets are doing.
The livestock markets closed mixed on Friday. June Hogs closed down $2.97 at $114.10. June Cattle closed down $1.02 at $132.75. August Feeders up 32¢ lower at $174.70.
MID-MORNING COMMENTS: 11 A.M.
Wheat prices are back on the plus side after trading higher, then lower and now back to post small gains, while corn and soybeans are under pressure. The two main factors that are taking the corn and soybean markets lower. The first is the improved weather outlook for next week, and the second is the drop in the U.S. and global equity markets.
Stats Canada released its quarterly grain stocks report today. Wheat stocks came in below trade estimates at 10.103 million metric tons (mmt) and this compares with 16.4 mmt last year. Canola stocks were also lower than expected at 3.9 mmt compared with 7.7 mmt last year. The world is not going to run out of wheat and vegetable oil, but stocks around the world are a lot tighter than last year.
At this time, July corn is down 11¢, and December is down 14¢. July soybeans are down 11¢ with November down 13¢. CBOT wheat is up 18, KC wheat is up 15¢, and Minneapolis wheat is up 8¢.
Livestock futures are mixed at this hour with June cattle down 5¢, and June hog futures are $1.80 lower, with August feeder cattle up 52¢. Crude is up $2.36 and the Dow is down 136 points today and is now down 1,229 points from the high on Wednesday. Looking at the action in the stock market, grain is actually hanging in quite well.
MORNING COMMENTS: 9 A.M.
Wheat futures are again higher with Minneapolis wheat posting new contracts highs. Corn and soybeans are starting lower. The weather looks good for planting and lower U.S. and global equity markets are taking prices lower. Crude oil is higher again today trading above the $110 benchmark.
Around the world, stock prices are lower, and the grain markets in China are steady to higher, with wheat futures on the Matif exchange in Europe trading at new all-time highs.
Last week the USDA Report Crop Progress report on Monday showed 2022 U.S. corn 14% planted compared with 42% last year and 33% average. Corn emergence is 3% compared with 7% last year and 6% on average. The growing season starts when the corn emerges, and emergence will be slow this week due to cool temperatures.
Looking ahead to the report on Monday, May 9, I look for planting to advance to about 34%. This would be well below last year and the five-year average, however, it looks like a lot will get done this week. I expect corn planting to move from 25% vs. 67% last year and the 55% five-year average.
The Monday, May 2 report for soybeans showed that the U.S. soybean crop is 8% planted compared with 22% last year and 13% average. It is too early to worry about planting dates and planted acres for soybeans; the eventual soybean acreage will depend on what happens with corn planting in the northwestern Corn Belt and what happens to spring wheat acres.
At this time July corn is down 12¢, with December corn trading 15¢ lower. July soybeans are down 19¢, with November down 20¢. Wheat futures are 20¢ to 30¢ higher. The bull spreads continue to work in the corn and soybean markets.
In the outside markets crude oil is up $1.60 per barrel, and the U.S. stock market is lower with the Dow now down 335 points.
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.