Markets close mixed. Monday, May 9, 2022
Today, rapid planting progress over the weekend along with improved weather forecasts, pressured the corn and soybean markets. The outside markets also were negative, with the hard drop in crude oil and the U.S. stock market added to the selling pressure. Corn closed down 10¢ to 12¢; soybeans closed down 36¢. Wheat futures closed down 16¢ on the CBOT, down 6¢ on KC wheat and Minneapolis wheat – closed 1¢ higher.
The USDA Crop progress report today showed corn plantings at 22%. This is below what the trade had expected and is behind last year’s pace of 64% and the five-year average of 50%. Soybean planting advanced to 12%, which compares with the five-year average of 24%. Spring wheat plantings came in at 27%, which is 20% behind the five-year average. Winter wheat crop conditions were steady with last week at 27% good to excellent. This was less than expected.
It is very important to watch how much corn and spring wheat have emerged in the USDA Crop Progress reports. This week the USDA reported that 5% of the corn has emerged – this is 10% behind normal. For spring wheat, emergence is reported at 9% compared with the 15% five-year average
Livestock futures closed mixed on Monday. June Hogs closed down $2.80 at $101.30, June Cattle closed up 80¢ at $133.55, and August Feeders closed down 47¢ at $174.22.
In the outside markets, crude oil has had over an $8 trading range and is down $7.32 per barrel. The stock market fell hard into the close with the Dow down about 700 points (-3%) with the Nasdaq down 4.2% at this time.
It is a down day in almost every market. The only two contracts that are green (meaning it’s trading higher) are the U.S. dollar index and Minneapolis wheat. Everything else is lower to sharply lower with a lot of red on my screen to start the week.
The two big factors today are: first, improved planting weather in the U.S., and second, increased concern about the COVID problem in China and the possible impact that the slowdown will have on global trade and global consumer demand.
Crude oil is down over $6.00 per barrel early today and the stock market has turned sharply lower. The Dow is down 515 points making new lows for the year. The major indexes were down 1.5 to 3% loss for the NASDAQ. It’s a risk-off day and that is usually negative for the commodity markets.
Nearby corn is holding support at $7.80 and the low in July soybeans so far today is $15.78. I do not want to see nearby corn close below $7.80 or July soybeans below $15.80. If wheat prices can manage to close higher, it should help corn and soybean prices stabilize.
July corn’s last trade is at $7.84 with key chart support now at $7.80, and July soybeans last trade is down 37¢ at $15.85 with key support at the 10:30 low at $15.78. July CBOT wheat is now down 16¢ on the day, and July KC wheat is down 5¢ Minneapolis. July wheat futures support unchanged on the day.
Corn and soybean prices are lower, while wheat futures continue higher. Minneapolis wheat is again posting new contract highs. Weather over the weekend was open for much of the Corn Belt, and rapid planting progress is being reported. The improved weather and lower stock market are taking the corn and soybean markets lower. Wheat is higher on disappointing yield reports from India, dry weather in the southern Plains, and wet conditions in North Dakota.
Around the world stock prices are lower; the grain markets in China are steady to higher with wheat futures on the Matif exchange in Europe are higher, and are now trading at new all-time highs.
The USDA Report last Monday showed 2022 U.S. corn is 14% planted compared with 42% last year and 33% average. Corn emergence is 3% compared with 7% last year and 6% average. The growing season starts when the corn emerges and emergence will be slow this week due to cool temperatures. Looking ahead to the report today I look for corn planting to advance to 25%.
For soybeans, the USDA report last Monday showed the 2022 U.S. soybean crop is 8% planted compared with 22% last year and 13% average. Next week, I look for nationwide soybean planting to jump to 18% complete. The eventual soybean acreage will depend on what happens with corn planting in the northwestern Corn Belt and what happens to spring wheat acres.
At this time, July corn is down 6¢, with December corn trading 11¢ lower. July soybeans are down 19¢, with November down 20¢. Wheat futures are 4¢ to 12¢ higher. The bull spreads continue to work in the corn and soybean markets.
No help from the outside markets so far today. Crude oil is down $2.90 per barrel, the U.S. stock market is lower with the Dow now down 390 points, and the U.S. dollar is higher again.
Author: Al Kluis
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