Spillover from the lower crude oil put some pressure on the corn market today. The strength of the U.S. dollar is not helping U.S. corn be competitive. The bear spreads took over in the corn market today in a typical turnaround Tuesday performance. May corn was down 9¼¢ with December corn down 2¾¢.
Soybeans saw a mixed day of trade. May soybean futures 1¾¢ higher with November beans down ½¢. USDA announced another sale of old-crop soybeans for export. It was sold to an unknown destination but will likely be a shipment to China later this summer.
May Chicago wheat closed down 21½¢. May Kansas City wheat closed down 13½¢, and May Minneapolis wheat closed down 5¾¢.
Livestock prices closed the day mixed. Live cattle futures finished the day up 77¢ on the June contract, May feeder cattle closed up $1.62, and June lean hog futures closed the day $1.07 lower.
Crude oil is down $5.68 and the Dow futures were 501 points higher. Crude oil came under pressure today as traders are thinking we could see an increase in crude oil inventories. EIA will release its weekly data tomorrow, and many traders are pricing in and expecting an increase in inventories. The strong U.S. dollar also weighed on commodities as a whole.
U.S. weather is a positive for grain prices. A slow start to U.S. planting should not see much help until we get into May. We still have plenty of time and a good rule to go by is we usually need to see 50% of the U.S. corn acres planted by May 10 to have a good chance at achieving a trend line yield. With current demand forecast, we will need to achieve a trend line yield for corn and soybeans.
Weather in South America, mainly Brazil, is starting to dry out a bit where their second-corn crop is growing. If conditions do not improve soon, we could see the USDA take the crop size down a bit in future reports.
Midday Comments: 11 a.m.
U.S. grain prices are choppy this morning with some selling showing up. The broader trend is still up, and today’s action is a typical turnaround Tuesday. The weather forecast is still not favorable for much planting to get done in the U.S., so we should see support to grain prices on this pullback.
May corn futures are down 11¢ with December corn futures down 4¢. May soybean futures are 1¢ higher with November futures down 1¢. May Chicago wheat is 18¢ lower, May Kansas City wheat is 12¢ lower, and May Minneapolis is 8¢ lower.
Livestock prices are higher with live cattle up 80¢, feeder cattle are $1.20 higher, and lean hogs up 10¢ per hundred. Meat prices are higher as traders look at overall supply and are concerned with the amount of beef and pork we could see this summer. We are starting to see pork prices rise in Europe and China, which should help support U.S. prices as the consolidation seems to be wrapping up.
Crude oil is down $5.40 this morning, and the Dow futures are 420 points higher. After close to a $17 rally in crude oil, we are seeing some pressure today. The correction feels more of that, a correction. Demand for energy seems to be increasing as we are getting close to driving season and with the TSA announcement that the mask mandate has been lifted at airports and on airplanes, we could see another boost in demand for airfare. Pressure in crude oil is spreading over into other commodities.
Opening Comments: 8:45 a.m.
May corn futures are 5¢ lower. May soybean futures are 5¢ lower. May Chicago wheat is 2¢ lower. May Kansas City wheat futures are 2¢ lower, and May Minneapolis wheat futures are 1¢ lower.
Livestock prices are mixed this morning. Live cattle are 10¢ higher. Feeder cattle are 55¢ higher, and lean hog futures are 75¢ lower.
Crude oil is down $3.82 this morning, and the stock market is up 120 points to start off Tuesday’s trade.
It’s turnaround Tuesday. After trading higher most of the night and early morning, we are seeing some selling pressure. Nothing fundamentally has changed but after the higher trade from yesterday, we are seeing a little selling.
According to the recent USDA Crop Progress report, 4% of corn is planted and 1% of soybean acres are planted so far this year. Couple this information with a cool and wet weather forecast, and we can look for grain prices to be supported on any breaks. Winter wheat condition also lost 2% in the good/excellent category.
USDA did announce an export sale this morning for old-crop soybeans. The U.S. sold 123,650 metric tons of old-crop soybeans to unknown destinations. The export demand for U.S. soybeans continues to remain very strong.
In outside markets, we are seeing crude oil pull back after a nice surge higher. Europe seems to be following through with buying less energy from Russia. The U.S. dollar is higher this morning trading at 100.92. Long term, if the U.S. dollar is over 100.00, it is not positive to U.S. commodities.
About the Author: Cory Bratland is a chief grain strategist with Kluis Commodity Advisors.