Wheat prices close double-digits higher Thursday

A negative market reaction for the bean market to USDA’s acreage estimates.

On Thursday, the CME Group’s farm markets await bullish news.

At the close, the March corn futures settled 2¾¢ lower at $5.50¼. May corn futures closed 1¾¢ lower at $5.49. New-crop December corn futures finished ¾¢ lower at $4.59¼.

March soybean futures closed 8¾¢ lower at $13.75. May soybean futures finished 8¼¢ lower at $13.76¾. New-crop November futures settled 2½¢ lower at $11.86½.

May wheat futures settled 17¾¢ higher at $6.65¾.

May soymeal futures closed $6.20 short term lower at $425.00.

May soy oil futures finished 0.11¢ higher at 46.25¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.69 per barrel lower (-1.13%) at $60.45. The U.S. dollar is lower, and the Dow Jones Industrials are 96 points lower (-0.31%) at 31,516 points.

Jason Roose, U.S. Commodities, says that the markets face multiple bearish factors.

“Improving weather in South America allowing its soybean harvest to accelerate and lack of new export business from China for corn or beans are pressuring the markets today. Also, bear spreads are leading the market’s trading activity, plus lower ethanol production and support from the U.S. dollar have also put a short-term ceiling on this high-energy market. Larger acre estimates will also be a main topic the next 30 days,” Roose says.

Bob Linneman, Kluis Advisors, says that investors are looking for market-friendly news.

“Will the lack of fresh news give the bears an upper hand soon? Or will traders start trading the technical indicators on the charts,” Linneman stated in a daily note to customers.

Linneman added, “March grain options expire on Friday. The $5.50 strike for corn has over 10,000 calls, while there are nearly 9,000 puts. The $14.00 strike for soybeans has over 11,000 calls, while only 3,000 puts. Prices often navigate toward these high open interest strikes during expiration week.”

Jim Bower, Bower Trading Inc., says that today’s USDA initial U.S. acreage estimates equal the trade’s expectations.

“Initial 2021/22 acreage ideas by USDA indicate expectations for total acreage among corn, wheat, and soybeans to rise to 227.0 million acres from last year’s 218.3 million and compares to the sum of average wire service survey estimates of 228.0 million acres,” Bower stated in a daily note to customers.

Dr. Bill Tierney, Ag Resource Company chief economist, says the U.S. farmers face a challenge planting the amount of acreage the USDA is projecting.

“Area seems close to what we thought, and the rest of the trade too. It will be a real challenge to get that all planted and achieve “trend” yield or better. We are anxious to see what US soybean ending stocks are projected to be for next year. We don’t expect much of an improvement over this year’s VERY tight stocks,” Dr. Tierney says.

Bower added, “With prices rising sharply and U.S. balance sheets tightening considerably, especially soybeans and corn, expectations are for a return of total planted acreage toward decade-high levels barring major weather-related planting issues this spring.”

Bower said that last year, 10.2 million acres had prevented planting claims, while 19.6 million acres were included in the disastrous 2019 campaign.

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Tags: USDA, corn futures, CME Group, CME Group's farm markets