Prices collapse at day’s end. Thursday, July 21, 2022

Corn and soybean prices fell below support today as prices sold off hard again into the close. Wheat closed lower after trading higher most of the day.

The combination of improved weather forecasts, fund selling, and lower energy prices put pressure on prices. This does not seem logical at a time when the U.S. crop is probably getting smaller. As I look ahead to next week, I expect crop conditions to take a 2-3% decline in the Monday USDA Crop Progress report.

With today’s price collapse, I pulled out my weekly charts and the next support for nearby corn now is at the November 2021 low of $5.62. For soybeans the weekly chart now shows support is at the January 2022 low of $13.82. The first day prices close higher, could signal a short-term low.

September corn closed down 16¢ today at $5.76. December corn closed down 16¢ at $5.73.  August soybean futures closed down 30¢ at $14.18, while the November contract closed 31¢ lower. Wheat futures closed 9¢ to 13¢ lower.

The U.S. dollar is down 0.17 points. Crude oil is down $3.70 per barrel. The stock market has turned higher with the Dow now up 42 points.

In the livestock markets, August hogs closed up $1.42 at $116.30, August cattle closed down 2¢ at $135.72, and August feeders closed up 45¢ at $178.27.

The corn and soybean markets were hit hard right at the 8:30 a.m. open and then bounced back as we continue to see very large daily trading ranges. It looks like Russia will tun the gas back on for Europe and this has crude oil and energy prices under pressure. Soybean oil is also lower, but well off the early day lows.

At this hour, September corn is down 11¢ and December corn is 12¢ lower. August soybean futures are down 25¢, November soybeans are 24¢ lower. Wheat futures are mixed, with CBOT wheat up 1¢, KC wheat down 2¢, and Minneapolis wheat 6¢ lower.

I am getting some questions now that are just the opposite of early May (when farmers asked how much higher the grain markets would go and what could turn prices lower). Now the question is when will prices stop going down, and what will signal the bottom.

To signal short term low, prices need to close higher. To signal a longer term low, prices need to close above the two previous weeks’ high. I have two encouraging points on my charts: December corn is holding support at $5.66 and November soybeans are holding support at $13.00 – so far.

In the livestock market today, August hogs are up $1.40 at $116.27, August cattle are up 20¢ at $135.95, and August feeders are up 10¢ at $177.97.

In the outside markets, crude oil is now down $3.20 per barrel. The U.S. stock market has turned lower, with the S&P 500 down 4 points, and the Dow is down 186 points.

As funds liquidate and weather forecasts look more favorable for crop development starting next week, grain prices remain under pressure. Nearby corn futures are now trading below the January lows, making new lows for the year.

September corn is down 14¢. December corn is down 16¢. August soybeans are trading 21¢ lower, and November soybeans are down 25¢. Wheat futures are 7¢ to 9¢ lower.

On the Dalian Commodity Exchange in China, corn and soybean futures are slightly lower. On the Matif exchange in Europe, wheat futures are 10¢ a bushel higher at $11.30.

The weekly export sales report released today was OK, but I view it as disappointing. I think the lower futures price and lower U.S. dollar will bring back buyers, but it has not happened yet.

Corn exports were just 1.3 million bushels, below what we need to see each week. Soybean sales were 7.5 million bushels, an OK number, but it is not a trend changer. Wheat exports were about as expected at 18.8 million bushels.

Author: Al Kluis

Tags: wheat, cattle, futures, сorn, markets, feeders, prices, животноводство, soybean, hogs