Large fund selling and a potential change in the weather forecast puts pressure on the grain markets today. On Monday and again today, global vegetable oil and wheat futures moved sharply lower, and the lower soybean oil and wheat prices today put pressure on the corn and soybean markets as well.
July corn had a 26 cent trading range and closed 24 cents lower today at $ 7.60. December corn closed down 29 ents cents at $ 7.01. July soybean futures closed down 21 cents at 16.81, while the November contract closed 27 cents lower. Wheat futures closed lower with CBOT wheat closing down 59 cents. KC wheat closed down 63 cents, and Minneapolis wheat was down 53 cents.
Today’s USDA Crop Progress report came in close to trade estimates with corn ratings falling 2% to 70% good / excellent. Soybean ratings fell 2% to 68% good / excellent. Spring wheat ratings were up 5% to 59% good / excellent.
I look for ratings to move lower again next week. I was surprised at the huge sell-off today in the grain markets. I still look at the extended forecast and see overall dry conditions in 30% to 40% of the Corn Belt. It’s not hot, but it is dry.
In the outside markets, the US dollar is trading slightly lower. Crude oil is now $ 1.09 higher. The stock market posted an impressive rally, and the Dow is up 660 points at this hour.
The livestock markets closed mixed on Tuesday. August hogs closed up 1.92 at 109.80. August cattle closed down 32 cents at 136.25, and August feeders closed up $ 2.35 at $ 175.30.
Midday Comments: 11:05 PM
The corn market moved sharply lower early today and is now rallying back from those lows. Soybeans were hit hard by sharply lower palm oil and soybean oil prices. Wheat futures are all lower. Note that last week corn futures put in a low on the first day of trade. Did we do the same today?
At this hour, July corn is currently down 21 cents. December corn is down 28 cents. July soybean futures are currently down 14 cents. November soybeans are 18 cents lower. Wheat futures are lower, with CBOT wheat down 36 cents. KC wheat is down 47 cents, and Minneapolis wheat is 42 cents lower.
The two keys today are what the USDA projects for the crop condition in today’s Crop Progress Report out later today, and the second is what the weather model updates show over the noon hour and tonight.
On my charts, corn and soybeans prices held key support while wheat prices have confirmed a seasonal top. Corn and soybean prices are lower, but the bull spreads are working.
In the livestock market today, August hogs are up $ 1.80 at 109.67. August cattle are up 7 cents at $ 136.65, and August feeders are up $ 2.55 at $ 175.50.
In the outside markets, crude oil is now 95 cents per barrel. The US stock market is higher with the Dow up 510 points. The US dollar index is .40 lower at 104.30.
OPENING COMMENTS: 9:05 AM
After the three-day weekend, the US grain markets are sharply lower and the US stock market is higher. The extended forecasts are not as hot, and the 6- to 10-day forecast brings in more moisture. Today’s grain market shows the market risk over any three-day weekend during the summer. I am surprised at how weak the grain markets are, but it is a long time until the 1:15 close
July corn is down 20 cents, December corn is down 24. July soybeans are trading 15 cents lower and November soybeans are down 21. Wheat futures are down 19 to 24 cents.
The key to watch in the USDA Crop Progress report today will be the crop conditions. I look for both corn and soybean ratings to move 1 to 2% lower and are likely to be lower again next week.
In the outside markets crude oil is up $ 2.15 per barrel, the US stock market is higher with the Dow up 505 points.
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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.