Soybeans close the day strong. Thursday, June 2, 2022

Soybeans had another strong performance with soybean oil trading sharply higher. Wheat futures also closed higher, while the corn market closed mixed.

July corn closed 1 cent lower today at $7.30. December corn closed up 2 ¾ cents at $6.94. July soybean futures closed up 39 cents at $17.29, while the November contract closed 26 cents higher. Wheat futures closed higher with CBOT wheat closing up 17 cents, KC wheat up 15 cents, and Minneapolis up 5 cents.

The Ethanol Production report, which was released today, was viewed as positive for ethanol and corn prices. Ethanol production increased to 1.071 million barrels per day, up from 1.014 million barrels per day last week. At the same time, ethanol stocks went down to 964 million gallons, which was down 31.5 million barrels from last week. Spot ethanol prices are $2.75 to $2.78 per gallon and demand remains strong. Can you imagine where gasoline prices would be if we did not have ethanol?

Today, the outside markets were viewed as bullish for the grain markets. The U.S. dollar is trading lower. Crude oil is up $1.50 per barrel, and the stock market moved higher with the Dow up 284 points at this hour.

In the livestock markets, June hogs closed up 25 cents at $110.05. June Cattle closed up 82 cents at $133.62, and August Feeders closed up $3.22 at $172.95.

The USDA announced another large soybean sale – this time to Pakistan. The sale was for 352,000 tons with 55,000 old and 297,000 new.

At this hour, July corn has had a 13-cent trading range and is currently down 1 cent. December corn was lower most of the morning but is now 3 cents higher. July soybeans have had a 51-cent trading range and are currently up 39 cents. November soybeans are 26 cents higher. Wheat futures are higher, with CBOT wheat up 18 cents, KC wheat up 30 cents, and Minneapolis wheat 9 cents higher.

I am impressed that the bull spreads keep working in soybeans and even with these high prices we do not – yet – see any demand destruction. For wheat, the early week meltdown in the wheat futures market has U.S. futures price trading at a discount to the world price – not bullish wheat at this time of year. I would not sell anything after the recent hard sell-off. U.S. wheat futures appear to be too low.

The trade will watch closely for any changes in the weather forecasts over the weekend and what the USDA indicates in the weekly Crop Progress report next Monday. I think the initial crop ratings for corn will come in quite high. The crop is 7 to 10 days behind normal but looks good in most areas.

In the outside markets crude oil is now up $2.00 per barrel. The U.S. stock market has reversed course and is making new highs on the day with the Dow up 184 points.

The grain markets are all up this morning, after getting slammed lower yesterday. Funds continue to sell.

At this time, July corn is up 6 cents. December corn is up 5 cents. July soybeans are up 11 cents. November soybeans are up 8 cents. Winter wheat futures are up 16 to 20 cents, while Minneapolis wheat is 15 cents higher.

The week-to-date change shows corn down 39 cents. Soybean futures are down 30 cents, and wheat futures are down $1.00 per bushel on the CBOT. Minneapolis wheat is down 87 cents; while KC wheat is down 85 cents.

I am surprised at how hard the wheat market dropped because of Putin’s comments about opening the Black Sea to Ukrainian grain exports. Why does he want to do this? In my heart, I hope it works; in my head, I know it is a long shot. This remains a very choppy market – do not sell on hard breaks and do not buy rallies.

In the outside markets, crude oil is down $1.30 per barrel. The U.S. stock market is slightly higher. The U.S. dollar index is down 0.48 points, and livestock futures are all slightly lower.

Livestock markets are called higher in the early trade.

Author: Al Kluis

Tags: wheat, cattle, futures, ethanol, Market, corn, feeders, soybean oil, животноводство, soybeans, Production, hogs