Grains Up at the Close

Grain prices closed in positive territory after a steady rally unfolded throughout the day. March corn was up 12¢ at the close settling at $4.97. Traders have been eyeing the $5 mark in March futures as a potential stopping point as the psychological level could stop the rally. Above $5, the next major upside target is likely the May 15 high at $5.08. March soybeans settled the day up 14¢ at $10.60.

If the rally is going to continue, last Thursday’s high of $10.76 is the next upside target for the bull camp. The wheat complex was up 16¢–19¢, near the highs of the day, as reports suggest Russia is likely to see exports fall this year due to production shortfalls caused by late-season weather problems. Continue to watch updates to South American harvest progress and changes to the weather forecast.

Cattle futures were hit with steady selling pressure today after hitting new all-time highs yesterday. The bullish momentum is not broken by one day of lower trade; however, traders are aware that the funds are likely holding a record long position in the Live Cattle. When the funds want out, the selling pressure could get intense.

March Feeder Cattle were down $2.97, February Live Cattle is down $1.52 at $207.02 while February Lean Hogs were unchanged after trading both positive and negative throughout the day. Will cash trade develop before Friday to help give the futures market direction of where spot supply and demand sits?

The outside markets are reacting to the Federal Reserve board’s decision to keep short-term interest rates unchanged. They have noticed recent economic reports show that the 1% cut in the last few months of 2024 is having an impact to the economy and the proper strategy is to pause on any further changes to interest rates.

S&P futures are down 20 points, but well off the daily low, Dow Jones futures are down 80 points, and crude oil is down $1.08. This decision was expected, so the reaction is relatively quiet. 

Published at 2:15 p.m.

Grains in the Green This Morning

Grain prices started higher this morning after a stronger overnight session. March corn is up 8¢, December corn is up 5¢, March soybeans are up 7¢, November soybeans are up 7¢, and wheat is up 7¢–10¢.

Forecasts are having a strong impact on day-to-day changes to prices. Meaning the trade is very closely watching harvest progress reports and planting progress reports of second crop acres. Delayed harvest is due to wet conditions in many areas, while the delayed planting of second crop acres is tied to slow harvest pace. If the trend continues at current pace, the second crop acres will not be planted in the ideal timeframe for optimal yield. The trade will be on the edge of their seat for the next few weeks waiting for a significant change in forecasts that will either be bullish for grains or bearish.

Livestock prices are mostly lower after the open on Wednesday. March Feeder Cattle are down $1.10, February Live Cattle are down 60¢, February Lean Hogs are steady. The cattle sector has been on a steady streak of higher highs and higher lows for the past month. Prices for both front month contracts are hitting new all-time highs and the trend continues to look friendly. Cash markets for both Feeder Cattle and Live Cattle are very strong and that is helping to support futures prices on brief pullbacks. The funds are likely holding a new record long position in Live Cattle based on trade guesses heading into this weeks Commitment of Traders report. This is when things get interesting, meaning at the top, things can change quickly.

Outside markets are mixed. The U.S. dollar index is up 0.27 at 107.99, crude oil prices are down 41¢ at $73.60, S&P futures are down 2 points at 6089, Dow Jones Futures are up 88 points at 45,102 and gold futures are up $3 at $2774. The Federal Reserve board will announce their decision on any changes to short-term interest rates today. The market is split about whether they cut or hold steady. Economists feel the better decision now would be to sit tight and see how the economy gets going under the new White House administration.

Published at 9:35 a.m.

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Editor’s Note: The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance – whether actual or indicated by simulated historical tests of strategies – is not indicative of future results. Trading advice reflects good-faith judgment at a specific time and is subject to change without notice. There is no guarantee the advice given will result in profitable trades.

About the Author: Bob Linneman is a commodities broker with Kluis Commodity Advisors. Linneman grew up on a diverse farm in eastern South Dakota. Between milking cows, managing a beef herd, and farming various crops, he experienced many aspects of agriculture firsthand. After graduating from North Dakota State University with a degree in business, he moved to Hawaii with his wife. There he was an associate portfolio manager for a fixed income firm that managed $2 billion in assets. After nearly two years in Hawaii, he moved back to the Midwest and began his career in commodities. Linneman is licensed as a Series 3 and Series 30 commodity broker.