Monday May 22, 2023 5:10 AM CST
MORNING MARKET COMMENTS BY: Al Kluis
Good morning. This is Kluis Commodity Advisors with your opening grain comments for Monday May 22, 2023. On Friday, the wheat and soybean markets closed sharply lower on massive fund-selling and ideal weather forecasts.
The news over the weekend that was positive for corn and soybean oil is that it appears the EPA will not allow electric vehicles to claim RIN credits. That will help ethanol and biodiesel manufacturers maintain profitability.
At this hour, corn futures are 6 cents higher; soybean futures are 8 cents higher and wheat futures are 6 to 12 cents lower.
On the Dalian Commodity Exchange in China, corn and soybean futures are slightly lower. On the grain futures market in Europe, wheat is 10 cents per bushel lower at $7.23.
TO DO: Review our price targets and where you should be. We completed cash 2022 wheat sales last week, and also got 10% of the new crop wheat sold ahead last week.
WHAT WE’RE THINKING: If July corn closes above the two-day high at $5.72 this week, then it will confirm an important short-term low and start the process of filling the large May-to-July corn continuation gap.
WHAT TO WATCH: I am watching the USDA Crop Progress report today to see if emergence is up to the five-year average for corn and spring wheat. The key will be what happened in North Dakota last week, and how much corn and spring wheat will be left to plant by the crop insurance key date of May 25.
THE MARKETS
Overnight Markets
July Corn: The trading range is 9 cents; the last trade shows corn up 6 cents at $5.60.
July Soybeans: The trading range is 15 cents; the last trade shows soybeans up 8 cents at $13.15.
Wheat: Chicago wheat is down 7 cents, KC wheat futures are down 14 cents, Minneapolis wheat is down 8 cents.
Global Stock Markets: The stock market in China is up 1.1% and in Japan the stock market is up 0.7%. European stocks are up 0.3%.
Outside Markets: The US Dollar Index is down 0.11 points at 103.08, crude oil is up 2 cents per barrel at $72.01, S&P futures are up 1 points at 4,206; Dow futures are up 14 points at 33,510 and gold futures are down $1 per ounce at $1,981.
Livestock Futures: In the livestock markets on Friday, June Hogs closed down $2.27 at $83.02, June Cattle closed up 20 cents and August Feeders closed up 60 cents at $235.10.
TODAY’S CHART: Corn
About this chart: This is the weekly CBOT Corn continuation chart. You can see the major low in October 2021 ($5.06), the rally to the high the last week of April 2022 ($8.27), the collapse to the low in late July ($5.61) and the next high in September ($7.25). The next low came in December ($6.23) and then the March low came in at $6.18. The July contract dropped below support at $5.61 as futures plunged to $5.47 last week. That is now key support. A close below $5.47 would project prices down to long-term chart support at $5.06. [Chart source: DTN/ProphetX]
NEWS AND EVENTS: Good morning! I’m DT, Al’s weather guy. We see no major changes in the forecast from Friday. This weekend brought some rain across the extreme southern Corn Belt and Delta. The weather was dry with seasonal temps across the northern Corn Belt, with cool dry conditions in Minnesota and North Dakota. The temps will now warm up to seasonal temps. We have a mostly dry week this week with some rain now showing up at the end of May.
Al tells me that all eyes are on the debt negotiations in Washington. However, with favorable and non-threatening weather, if the markets are just trading weather, then grain prices will start out lower this week.