Corn closes lower. Monday, March 7, 2022

At the close Monday, ag commodity futures were mixed, with nearby corn and soybean contracts down and May wheat up the limit.

May corn futures trimmed earlier losses to finish 3½¢ lower at $7.50¾. July futures settled 6¢ higher at $7.27¼. December futures ended 13¼¢ higher at $6.42¾.

May soybean futures closed 1¢ lower at $16.59½.

July soybean futures ended 1¢ higher at $16.34. New-crop November soybean futures finished 2¾¢ higher at $14.53.

May wheat closed higher, locked at the new daily limit of 85¢ – at $12.94.

May soymeal futures settled $1.70 per short ton lower at $458.70.

May soy oil futures ended 1.42¢ higher at 74.22¢ per pound.

In the outside markets, the crude oil market is $3.33 per barrel higher at $119.01, the U.S. dollar is higher, and the Dow Jones Industrials are 632 points lower (-1.88%) at 32,982.

As Jack Scoville of Price Futures Group summed up the day, “It seems that the emotion is starting to leak out of the market, but it is still all Ukraine all the time.

“May Chicago Wheat is limit up as the funds and other short specs try to get out – not with much success these days,” he says. “Soybeans are relaxing and should as the war does not really have much to do with soybean production.

“Nearby corn is weaker, too, and I am not sure why as the war has no effect on corn. Some long liquidation is going on I am sure.”

At an online meeting by Kansas State University economists Monday, they offered background information with little immediate hope for a change in wheat markets.

“We’re seeing a lot more conflict around the Black Sea region,” said economist Allen Featherstone. “This is the life blood in terms of exports from Ukraine.”

At midsession, falling stock prices, rising oil futures, and the war-shocked wheat market continue to drive CME grain futures.

An early pull-back in the May corn futures has widened to 9¢ lower at $7.45¼. July futures are 2¾¢ lower at $7.18½. December futures are 11¾¢ higher at $6.41¼.

May soybean futures are 4¢ higher at $16.64½.

July soybean futures are ¼¢ lower at $16.32¾. New-crop November soybean futures are 11¢ lower at $14.39¼.

The May wheat futures contract remains locked higher at the new daily limit of 85¢ – at $12.94. It’s the fourth trading day that the May contract has locked limit up.

May soymeal futures are $3.30 per short ton higher at $463.70.

May soy oil futures are 0.83¢ higher at 73.63¢ per pound.

In the outside markets, the crude oil market is $2.78 per barrel higher at $118.46, the U.S. dollar is higher, and the Dow Jones Industrials are 686 points lower (-2.04%) at 32,928.

Profit taking is driving some of the drop in corn futures today, says Don Roose of U.S. Commodities in West Des Moines.

Another factor: “The shaky RFS is a concern on corn,” Roose says. The White House is under pressure to weaken the Renewable Fuels Standard because of political pressure over corn used for ethanol and its effect on meat prices. Roose considers that to be exaggerated since distillers’ grains from ethanol production are fed to livestock.

Farm groups, meanwhile, are pushing for an EPA expansion of E15 sales in order to reduce pressure on gasoline. Last Friday, six farm and biofuel groups wrote the White House urging year-round sales of E-15 (gasoline and 15% ethanol).

On soybeans, “South American weather continues to improve, and that’s a bit of an anchor,” Roose says.

After overnight trading that saw sharp rises in the grain complex, wheat remains strongest in early mixed trading.

In early trading, the May corn futures are 7¾¢ lower at $7.46½. July futures are 2¢ lower at $7.19¼. December futures are 3¾¢ higher at $6.33¼.
May soybean futures are 1¼¢ higher at $16.61¾.

July soybean futures are 3¢ lower at $16.30. New-crop November soybean futures are 5¾¢ lower at $14.44½.

The May wheat futures contract is up its new, higher daily limit of 85¢ at $12.94. It’s the fourth trading day that the May contract has locked limit up.

May soymeal futures are $0.60 per short ton higher at $459.80.

May soy oil futures are 1.31¢ higher at 74.24¢ per pound.

In the outside markets, the crude oil market is $0.69 per barrel higher at $116.37, the U.S. dollar is higher, and the Dow Jones Industrials are 357 points lower (-1.06%) at 33,257.

Just before daytime grain futures trading began Monday, USDA released this trade news:

“Private exporters reported sales of 132,000 metric tons of soybeans for delivery to China,” according to Foreign Agricultural Service staff. “Of the total, 66,000 metric tons is for delivery during the 2021/2022 marketing year and 66,000 metric tons is for delivery during the 2022/2023 marketing year.”

Bob Linneman of Kluis Advisors, urges vigilance for those following a war market that took oil and grain futures higher overnight.

“As the war drags on in Ukraine, the total crop size projections for the 2022 crops in the Ukraine will move lower. Farmers should be putting fertilizer on their winter wheat crop right now, and getting ready to plant corn. This is not possible for most farms because of labor and fuel shortages,” Linneman says in an early morning message to clients.

In comments about the CBOT monthly wheat continuation chart, he noted the major high at $13.34 in February 2008. Prices hit a major low of $4.25 in June 2010.

“Last week the CBOT futures went to new all-time highs, closing at $13.48,” he says. “The May contract gapped higher in the overnight trade. One of the swing objectives I get now is at $14.70. Watch out. When the grain markets go up this fast, they will usually go down even faster when the trend changes.”

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