U.S. grain prices for the most part ended the day higher. The one exception was May corn futures ended the day down 3 cents. December corn, however, not only traded a new contract high, but we have a new high close up 6 cents and closing at $6.70. May soybean futures ended the day 5 ½ cents higher with November soybeans closing up 8 cents. Chicago wheat was down 1 cents, Kansas City wheat was up 3 cents and Minneapolis wheat closed up 7 cents.
Livestock prices closed the day mixed with live cattle 65 cents lower, feeder cattle 62 cents lower and lean hogs up 15 cents.
Crude oil is down 91 cents, and the Dow futures were 254 points higher.
The main action today was the spread in corn futures. The past two days we have seen the bear spreads take over in corn where the front month, May futures have been weaker than the deferred months. This has a tendency to be a signal of a potential change of trend, but I think it has more to deal with putting premium in the deferred months. We have plenty of corn to get us through this summer. If there are any issues growing a crop in the U.S. this summer, we could see new crop futures head higher.
We are hearing more talk about Ukraine’s inability to grow a crop this year. Normally, they will start planting in the next few weeks. Talk in the market place is that Ukraine could see its growing area cut in half due to fuel and fertilizer shortages.
READ MORE: A third of fields in occupied areas, hostile zones will not be planted, says Ukrainian ag journalist
Livestock markets were mixed on the day. For live cattle, it sure feels like we have plenty of supply in the near term but later this summer into this fall we could see tighter numbers being killed. Lean hogs are also experiencing something similar. I continue to hear of hog herd contraction across the globe due to high feed prices and African swine fever.
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11 a.m.
After trading strong on the overnight session, we have nearby corn futures under a little pressure with the back months higher. May corn futures are 5¢ to 6¢ lower with December futures up 2¢ to 3¢. Soybean futures are 4¢ to 5¢ higher across most months. Wheat futures are mixed with Kansas City wheat 1¢ to 3¢ higher, Chicago wheat is 10¢ lower on the May contract, and Minneapolis wheat is 2¢ to 3¢ higher.
Livestock prices are mixed with live cattle 20¢ to 30¢ higher, feeder cattle are 40¢ to 60¢ cents higher, and lean hogs down 60¢ to 90¢ per hundred.
Crude oil is down $2.21 this morning and the Dow futures are 238 points higher.
Spreads in the corn market are weak here today. We are starting to see some premium get added into the deferred contracts like December corn futures as we need to make sure we get the acres planted this spring and the U.S. grows a good crop.
USDA did announce an export sale of 240,000 metric tons of old-crop soybeans sold to unknown destinations. We continue to see some old-crop export demand for U.S. soybeans as South America deals with a smaller crop and logistics issues.
So far today’s action has been more typical and not the violent back-and-forth action we have been seeing the past few weeks. Key resistance in May corn is $7.63 and for May soybeans we would like to get a close above $17. We have traded above $17 in futures several times but have failed to close above that level.
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8:56 a.m.
U.S. grain prices are mixed this morning after trading higher in the overnight session. Corn is down 9¢ to 10¢ on the May contract; soybeans are 2¢ to 3¢ higher on the May contract. Kansas City wheat is up 19¢ to 20¢ against the May futures. Chicago wheat is up 18¢ to 20¢ against the May futures, and Minneapolis wheat is up 18¢ to 20¢ against the May futures.
Livestock prices are mixed this morning. Live cattle are up 20¢ to 40¢ across the board as that market seems to be establishing a bottom. Feeder cattle are up 80¢ to 90¢ with corn being under a little pressure and lean hogs, after their impressive rally yesterday, are seeing a typical turnaround Tuesday action.
Crude oil is up $4.10 this morning and the stock market is slightly lower to start off the week.
Crop conditions seem to be somewhat stable down in South America. Many private analysts still feel the USDA is overstating the size of the South American corn and soybean crops. Also, in the news yesterday, Argentina will resume exporting soybean oil and soybean meal after they raised their export tax by 2% up to 33%.
Ukraine’s President Zelensky said he is ready to sit down and try and negotiate a deal with Putin. This could be the first step toward a potential peace deal but likely will take several weeks. In the meantime, farmers are uncertain on how much of a crop they will get to plant and harvest this year. They are facing a fuel shortage, fertilizer shortage, financing issues, and infrastructure damage.
In the United States, many farmers are seeing their corn basis get a little weaker as ethanol plants fill up and export markets being a bit sluggish. For the past 30 to 60 days, we have seen a fair amount of grain move, especially corn, as farmers took advantage of the mild winter weather throughout much of the U.S. this year.
Editor’s Note: Cory Bratland is a chief grain strategist with Kluis Commodity Advisors.
