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Wheat market rallies back | Monday, June 13, 2022

The wheat market managed to rally back today. Corn and soybeans closed sharply lower but were well off the 10 a.m. low. The hard-down move in the U.S. stock market and the rally in the U.S. dollar put pressure on the corn and soybean markets in another volatile day of trade. Weather is a mixed bag with good growing conditions from Illinois through Iowa and Nebraska. Indiana and the northern Plains report crops that are way behind.

July corn had a 24¢ trading range and closed 4¢ lower today at $7.69. December corn closed up 1¢ at $7.21. July soybean futures closed down 38¢ at $17.07 while the November contract closed 34¢ lower. Wheat futures closed mixed with CBOT wheat closing up ¼ cent. KC wheat was down ¾ ¢, and Minneapolis wheat was up ¼ ¢.

The USDA Crop Progress report today showed that 97% of corn is planted nationwide. That compares to the five-year average of 97%. The USDA crop rating came in at 72% good/excellent down 1% from last week, and lower than the trade estimate of a 1% to 2% increase. For soybeans, the USDA report showed that 88% has been planted. This compares to 78% last week and the five-year average of 88%. The initial soybean crop rating came in right at trade estimates, showing 70% rated good/excellent.

For spring wheat, planting advanced to 94%. This was 1% less than the trade estimate and compares to 99% in the five-year average. Just 37% was rated good/excellent.

Looking ahead, watch the U.S. and the global stock market, and how much the Feds raise interest rates at its meeting on Wednesday.

In the outside markets, the U.S. dollar is trading at new record highs for the year. Crude oil is down 66¢ per barrel, and the stock market moved lower with the Dow down 355 points at this hour.

In the livestock markets, June Hogs closed up 20¢ at $108.00. June cattle closed down $2.20 at $134.00 and August feeders closed down $3.15 at $171.32.

MIDDAY COMMENTS: 11 A.M.

The stock market continued lower this morning with all of the major indexes falling below key chart support levels at the May low. The stock market is at new lows for the year with all of the indexes now down over 20%. On this “risk-off day,” commodity funds are bailing out of long grain and energy positions.

Fund liquidation and the anticipation of higher crop ratings from the USDA this afternoon are taking the grain markets sharply lower today. The grain markets appear to be in a broad trading range with prices up one week and then down the next week. So far, the grain markets are holding chart support.

At this hour, July corn has had a 24¢ trading range and is currently down 10¢. December corn is down 8 cents. July soybeans have had a 55¢ trading range and are currently down 40¢. November soybeans are 49¢ lower. Wheat futures have turned lower, with CBOT wheat down 16¢. KC wheat is down 15¢, and Minneapolis wheat is 11¢ lower.

The trade will watch closely the USDA Crop Progress due out this afternoon at 3 p.m. CT and the extended weather model updates after the close of trade today.

In the outside markets, crude oil is now down $2.20 per barrel, the U.S. stock market is sharply lower with the Dow now down 831 points or 2.7%.

MORNING COMMENTS: 9 A.M.

The U.S. and global stock markets are sharply lower today, and this is creating liquidation in the grain markets. It is what the trade calls a "risk-off" day. 

In the early grain trade after starting out higher last night, corn is now down 4¢; July
 soybeans are trading 29¢ lower, and wheat futures are 1¢ higher to 2¢ 
lower.

The key to watch in the USDA Crop Progress report today will be the crop conditions
 report for corn and the first soybean crop conditions report. I expect corn ratings to 
improve 1% to 2% to 74% to 75% good to excellent. For soybeans, the initial ratings will likely 
to show that 70% to 72% of the nation’s soybean crop is rated good to excellent.

In the outside markets, crude oil is down 81¢ per barrel. The U.S. stock market is 
being hit hard with the S&P 500 down 100 points. The Dow is down 610 points.

For the U.S. stock market, the key level of support is the low from May 20 at 30,935 for 
the Dow and 3,807 for the S&P 500. Closing below support and at new lows for the 
year would be viewed as negative for the stock market and the entire commodity 
complex.

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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