July contracts of corn and soybeans started Wednesday lower, fought back to trade higher, but then succumbed to lower closes, showing plenty of uncertainty about the road ahead for this year’s grain prices. All three U.S. wheats were lower most of the day and finished with double-digit losses.
One day after posting a high-volume reversal, July corn traded down it’s 25-cent daily limit overnight, regrouped to trade 16 1/4 cents higher on the day and then closed down 10 1/2 cents at $6.44 Wednesday. The increased volatility of the past two days comes after a strong surge of cash corn prices in April that took the country’s corn bids well above $6.00 and even above $7.00 at select sites from Iowa to Indiana. Judging by Wednesday’s 42 1/4-cent premium in the May contract over the July, commercial demand is still active and a bullish source of support for prices. Part of the nervousness that hit prices Tuesday and Wednesday likely came from a chance of rain developing for southern Brazil in the eight- to- 14-day forecast.
After Tuesday’s drop of 19 3/4 cents, July soybeans went on their own roller coaster ride Wednesday, closing down 5 3/4 cents at $15.13 3/4 when all was said and done. Soybeans still show many of the same bullish demand clues that have been pushing prices higher for most of April. May soybeans closed up 8 cents and finished 44 cents above the July contract — an ongoing sign of strong commercial demand for physical soybeans. There aren’t likely to be any soybean deliveries on the May contract Friday, but there may still be some shorts begging to get out.
Wheat has benefited from this month’s bullish surge in corn prices, but it does not have the same sense of urgent demand or panic that we see in corn and soybeans. There is weather risk early in 2021 and on that front, we see scattered showers in the U.S. Southern Plains Wednesday, reaching also into SRW wheat areas. There is more rain in the seven-day forecast for winter wheat areas, but not much for the Dakotas, Montana or for the Western Canadian Prairies. The northern wheat areas are expecting a better chance for precipitation in two weeks, but amounts will probably be light.
Meantime, cattle futures were under pressure with cash prices trading a $1.00 lower in the north and cattle pushed out to a Ma7 17th delivery. Hogs were mostly higher as we near top end resistance levels.
Farm and Ranch Director Jesse Allen has the closing update: https://lightningstream.com/ajax/GetODFile.ashx?call=MIDWEST&fileid=1406
***Also, get more analysis with today’s episode of Market Talk with Jesse Allen and Mike Zuzolo of Global Commodity Analytics. Link to the audio and/or video here: https://markettalkag.com/2021/04/28/wednesday-april-28th-2021-video-and-audio-podcast/
https://open.spotify.com/episode/52iyob0PFm7Bvne9HdEH2y?si=xxI8zpaORLusqgpAtD1hrA
