Wheat futures close down nearly 50¢. Friday, July 22, 2022

Soybean prices closed higher, with corn and wheat closing lower and right at the lows for the week. The trade is selling corn and wheat futures as they read more about the “Grain Corridor” opening up. The theory is that the agreement will allow wheat and corn to flow out of Ukraine from the Black Sea port of Odessa. I doubt it.

I keep hand drawn charts and in May as the grain markets soared higher, prices went off the top of my charts. That proved to be a good sell signal. Today prices went off the bottom of my chart – this tells me we are getting close to the low.

September corn closed down 11¢ today at $5.64. December corn closed down 9¢ at $5.64. August soybean futures closed up 16¢ at $14.34, while the November contract closed up 14¢. Wheat futures closed 42¢ to 47¢ lower.

The nearby futures contracts show the following week to week price change: corn closed down 40¢ and soybeans closed down 32¢. CBOT wheat closed 18¢ lower. KC wheat closed down 17¢. Minneapolis wheat closed down 37¢.

Looking ahead to next week here are some keys to watch.

Watch to see how much the USDA lowers crop conditions in the report next Monday. The trade is expecting a 2-3% decline.

Watch for a possible pattern change. As prices have been trending lower the highs for the week have come in on Monday or Tuesday and the lows on Friday. See if that pattern can change next week. A change in the pattern can signal a change in the trend.

On Thursday we will watch to see if anyone delivers on the August soybean contract and if deliveries are made – who takes the deliveries.

Today in the outside markets, the U.S. dollar is down 0.27 points. Crude oil is down $1.68 per barrel, and the stock market has turned lower with the Dow down 275 points  at this hour.

In the livestock markets on Friday August hogs closed up $2.40 at $118.70, August cattle closed up $1.65 at $137.37, and August feeders closed up $3.27 at $181.55.

A “Grain Corridor” opening would allow Ukrainian wheat back into the global export market. CBOT wheat is down 29¢. KC wheat is down 30¢. Minneapolis wheat is 33¢ lower. I am very skeptical of any significant amount of wheat moving out of the Ukrainian ports. I will watch the news carefully over this weekend. I think we are again being played by Putin.

Soybean prices are posting an impressive rally back today, and corn futures are also 1¢ to 2¢ higher.

At this hour, September corn is up 2¢, trading 11¢ above the low from last night. December corn is 3¢ higher. August soybean futures are up 22¢, which is 33¢ off the low. November soybeans are 26¢ higher.

I look at the good chance that crop conditions will move lower next week for corn and soybeans. The 30-to-90-day National Weather Service forecast for below normal precipitation and above normal temps are positives for corn and soybean prices. It feels like corn and soybean prices have made a short-term low, especially if prices can hold onto these gains into the close.

In the livestock market today, August hogs are up $1.27 at $117.60, August cattle are up $1.47 at $137.20, and August feeders are up $1.65 at $179.92.

In the outside markets, crude oil is up 51¢ per barrel, and the U.S. stock market is mixed. S&P 500 is down 8 points and the Dow is up 51 points.

Corn and wheat prices are under pressure as media reports that a possible grain corridor agreement will be signed later today. This would allow grain trapped in Ukraine to move. In my heart I hope this works, but my instinct tells me it will not.

September corn is down 5¢. December corn is down 4¢. Soybeans are higher after after testing major support. August soybeans are trading 5¢ higher, and November soybeans are up 4¢. Wheat futures are 28¢ to 34¢ lower.

On the Dalian Commodity Exchange in China, corn and soybean futures are lower. On the Matif exchange in Europe, wheat futures are 5¢/bushel lower at $11.89.

As I look ahead to next week, I look for the USDA Crop Progress report on Monday to show corn and soybean ratings down by 1-3% and several private forecasters have begun to take projected corn and soybean yields lower. When the funds are done selling, the grain market is setting up to be a good buy.

Around the world in the stock markets, China is down 0.1%, Japan is up 0.3%, and European stocks are up 0.5%.

In the early trade in the U.S. the stock market has turned higher with the Dow up 144. Crude oil prices are down 50¢ per barrel.

In the early trade in livestock futures, all are higher.

Author: Al Kluis

Tags: soybean, hogs, wheat, Одесса, cattle, futures, markets, Ukraine, Black Sea port, corn, feeders, prices, животноводство