Markets move higher in a choppy day of trade. Wednesday, April 13, 2022

Egypt bought 290,000 metric tons of wheat today with most of it coming from France. The price was $150 per ton, or about 30% higher than the last purchase in early February. The ethanol report today showed a slight slowdown in ethanol production last week. I wrote early today about watching the May to July and May to new crop price spreads, and, wow, did the bull spreads really kick into high gear.

May corn closed above $7.80 with May closing 7¼¢ higher at $783½. December corn closed 4¾¢ higher at $7.35¾. May soybean futures gained 6¢, while the November contract closed 1¼¢ lower. Wheat futures closed higher; CBOT wheat was up 9¾¢. KC wheat was up 11¾¢, and Minneapolis May wheat was up 1¢.

In the outside markets, crude oil is $3.50 per barrel higher. Livestock futures closed mixed with hog futures lower. Live and feeder cattle were higher. At this hour, the U.S. stock market is higher with the Dow up 235 points and S&P 500 up 38 points.

Looking ahead, I have two key fundamentals to watch tomorrow – the updated weather forecast and weekly export sales. The trade is looking for (combining old- and new-crop export sales) the following:

Corn: 1.8 to 2 million metric tons
Soybeans: 500,000 to 1.2 million metric tons
Wheat: 200,000 to 600,000 metric tons

Corn futures are mixed with old crop lower, and new crop higher. In a bull market, you need to feed the bull every day, and I have not seen any new bullish news today. One negative factor for wheat prices is the increased chance of a decent rain in the dry Southern Plains. With a three-day weekend starting on Friday, many traders are moving to the sidelines.

At this hour, May corn has had an 11¢ trading range and is currently down 1¢. December corn was lower most of the morning but is now 2¢ higher. May soybeans have had a 23¢ trading range and are currently down 6¢. Wheat futures traded lower until about 10 a.m., but are now up 7¢ to 13¢.

Here are three key factors I am watching into the market close today.

1. Will the early day lows in the grain market put in at about 8:30 to 9 a.m. hold?
2. Watch what the May to July and May to new crop spreads do in the corn and soybean markets. Bull spreads work in bull markets.
3. What do the midday model updates show for rain next week in the central Corn Belt and Southern Plains?

In outside markets, crude oil is up $2.40 per barrel. The U.S. stock market is higher, and livestock futures are mixed.

May corn is down 3¢ for the first time in 10 sessions. December 2022 corn is lower, but the day is not over. May soybeans are down 9¢, and wheat is unchanged to 3¢ higher for Minneapolis wheat.

Short term, the wet cold weather in the U.S. should be supportive for corn. Long-term into early May, it looks like a pattern change.

Author: Al Kluis

Successful Farming

Tags: feeder cattle, livestock futures, corn, price, soybean futures, wheat, live cattle