Closing Market Comments 5-11-2022

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Today’s Prices

Grain prices higher as traders and end users desiring to get some ownership ahead of tomorrow’s USDA May crop report.

Grain Market News

Soil Moisture

You can see the extreme wetness flooding and saturation in the far northern plains, primarily North Dakota and adjacent areas of Minnesota and South Dakota. This extends well into the Canadian prairie.

In the central and western belt, we don’t have as big as of a problem with surplus moisture, so just a day or two of drying would allow many to roll ahead in planting.

In the easter corn belt, saturation is a bigger problem and therefore it does take a little longer for fields to dry out before planting can progress.

Our biggest concern is the extreme wetness in the northern plains and the drought that could expand in the southern and southwestern plains.

High Temperatures

Mid 80s and even low 90s across much of the U.S. corn and bean belt including the heart of the U.S. corn and bean belt.

At this time that is actually favorable as it will allow for soil to warm up and allow for soil to dry out.

This will provide much better conditions for planting once we can start getting corn and soybeans in the ground.

Unfortunately, the northern plains are not seeing this warming and the southern plains is experiencing severe temperatures.

3-Day Observed Precipitation

Much of the eastern U.S. corn and bean belt is likely getting the planters rolling again as well as in the Delta where they have been missing out on the rain in the last week.

Areas of the western belt and into the plain are also likely planting but it’s not everyone.

Portions of Iowa have seen rain over the past 3 days and much of the Dakotas and central western Minnesota into the Canadian prairies have had rain preventing planting.

7-Day Precipitation Forecast

The 7-day forecast calls for additional rain in some of the wettest areas. Again, from the southern Canadian prairies into North Dakota, adjacent area of Minnesota and South Dakota and also additional rains in the central corn and bean belt.

We are getting planting going, many farmers are going aggressively right now, but it may not be a wide-open window for an extended period.

Temperature Outlook

This is showing a lot of heat in the south and southwestern US in the 6-10 and the 8–14-day forecast.

Cooler temperatures across the northeastern potions of the belt and the far North which could keep drying slow.

The precipitation outlook does call for above normal precipitation in the far northern plains in the 6-10 and the 8–14-day forecast, and dryness could continue to develop in the portions of the belt.

Conditions are much improved for about 75% of the belt, which will allow planting to go from 22% complete to maybe something in themed 40%.

Grain Market News

Bloomberg Commodity Index

There is certainly a strong uptrend in the commodity market, and we are not getting excessively overdone.

We were much higher back in the rally during 2011 and down in 2008 as well.

It certainly appears there could be additional room to the upside in the overall commodity sector.

Inflation: CPI

Inflation is still at a 40-year high, in March inflation was at 8.5% and this morning the rate is at 8.3%.

That is a very small deduction but still extremely high and at 8.3% inflation that number came in above what the trade was expecting.

Inflation is certainly a concern, and I do want to repeat that will encourage funds to hold on to long positions in the grain market.

U.S. Ending Stocks

The USDA will release its May crop report tomorrow morning.

This table shows US ending stocks and what the trade is expecting for tomorrow’s report.

World Ending Stocks

South American 2022 Production

July Corn Chart

The corn chart has turned higher, stabilized yesterday and turned higher today. This was enough to turn the technical indicators higher.

We do have a crop report tomorrow that could provide some surprises. But the chart and technical indicators do indicate some bottoming action and the potential for higher prices.

July Soybean Chart

Soybean prices also stabilized yesterday and rallied today; this made the chart looks better as well as the technical indicators turning higher.

The chart and technical indicators could be indicating some additional upside potential provided we don’t get any bearish surprises from the USDA crop report tomorrow.  

July KC Wheat Chart

Wheat prices made a new high for the move up to 12.07 on the July chart.

We took out the high posted from April and that puts 12.59 as the next target and unless we get bearish news, we wouldn’t be surprised to see the market working in that direction in the next few weeks.

Questions or Comments

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