Wheat exchanges close in the red. Thursday, April 28, 2022

Corn was quietly mixed. Soybeans were down 15 cents on May and down 4 cents on November.  All three wheat exchanges closed in the red today with CBOT down 8 cents, KC down 12 cents, and spring wheat down 12 cents.

The May grain contracts have first notice day tomorrow, which means many traders have shifted their positions to the July or further out contracts. Historically, we have seen contracts move wildly once they enter delivery window. One reason can be lighter volume. Another can be when commercials are needing the grain and want to take delivery. Worth watching if either of these scenarios play out ahead of contract expiration in a few weeks.

Feeder cattle did manage to close out the day in the green for most contracts. The April contract was down 22 cents, but the August contract was $1.62 higher at the last trade today. Live cattle struggled all day and ended in the red. April contract was down 72 cents, and the June contract was down $1.17. Lean hogs were 67 cents higher in June and $1.42 higher in August with the last trades today.

Crude oil managed to build positive momentum all day. Shortly after 2:00 today, futures were $3.50 higher near $105.50. Recall the comments earlier today that trendline resistance should be hit near $105.70 area. RBOB gasoline pushed to the highest level since March 9. Although the chart could be suggesting a push toward contract highs, the demand situation has to be concerning the bulls.

The U.S. dollar does look poised to breakthrough the 104 mark this week. The strong pattern of higher highs and higher lows that started on April 21 is telling traders to not fight the trend. The bears are likely going to put up a fight at the March 2020 high of 103.96, but will they have enough strength to limit any further upside?

At mid-day, corn futures are about a nickel higher. Soybeans are down 15 cents in the May contract and down 1 cents in November. Wheat is mixed as CBOT is up 5 cents. KC is down 2 cents and spring wheat is up 5 cents. Surely many farmers are trying to get in the field today ahead of the forecasted rainfall the next few days.

The Drought Monitor was released today showing 45% of the U.S. in moderate to exceptional drought. Nebraska, Kansas, Oklahoma, and Texas are the eastern border of the main problem area.

Reports concerning Ukrainian planting progress suggest they have about 25% of the spring crop planted. They face many hurdles ahead including debris, unexploded bombs, land mines, and low fuel supplies. Officials are hopeful they will be able to get 75% of the spring acreage planted.

Livestock futures are improving since the morning trade. Feeder cattle are mixed with April down 20 cents, and August is up 75 cents. April live cattle are up $1 while June are down $1.25. Lean hogs are trading higher with June up 80 cents and August up $1.20.

The U.S. dollar is till hovering around the 103.60 mark. After coming within 0.01 of the March 2020 high this morning, the bulls appear content to trade back and forth at this level.

Crude oil is up $2.40 at $104.42. The crude bulls did get some new money flow after making a convincing move through the Wednesday high. Overhead resistance sits near $105.70 today as a downward sloping trend line from prior highs looks to be formidable resistance.

Another daily export sale was announced this morning. A total of 1,088,000 metric tons of corn sold to China. Of the total, 476,000 was old crop and 612,000 is new crop. With the big corn sale, one would have expected to see corn prices sharply higher. Futures briefly started higher, but within minutes of the 8:30 open had traded slightly lower, and are now quietly higher. Soybean prices have drifted lower this morning. May is down 12¢ while new crop is down 3¢.

The Weekly Export Sales report was released this morning. The report was disappointing for wheat, on the low end for corn, and near the high end for soybeans.

Livestock prices are mixed this morning. Feeder Cattle are trying to rebound as August is up 90¢. Live Cattle are quietly higher with April up 50¢ and June up 20¢. Lean hogs are trading the opening lows down 65¢ to 75¢.

The U.S. economy contracts in first quarter of 2022. We went from 6.9% growth in the fourth quarter last year to -1.4% contraction. The average estimate for the report was a mild 1% increase. Traders have to decide if this is a one-off report and things will return to small, positive growth next quarter or if this is the start of a very worrisome trend in the United States.

Crude oil is up 50¢ near the 102.50 mark this morning. The U.S. dollar continues to climb higher as futures are up 0.74 points today at 103.70. The high so far today came within 0.01 of the March 2020 high. Keep an eye on what happens if prices can break over this key target.

Tags: grain, soybeans, wheat, contracts, сorn, live cattle, spring wheat, feeder cattle, lean hogs