---

Grain Markets Recap

Last Friday’s surprise Planted Acreage report made for an interesting trade in the holiday-shortened week. The significantly higher than anticipated corn acreage (94.096 mil acres) paired with the significantly lower than anticipated soybean acreage (83.505 mil acres) pushed the bean:corn price ratio to nearly 2.75. Meanwhile, total wheat acreage was mostly in line with expectations at (49.628 mil acres) but rumors of a Russian strike on a Ukrainian nuclear facility brought ample volatility to the wheat contracts. All eyes will be on Wednesday’s WASDE report for any changes to yield expectations. 

 

Corn: 

Following Independence Day pause, the December Corn contract traded to a new contract low, trading down to 485-4 before - ultimately settling at 493-4. Bulls were able to defend Tuesday’s strong close, and the 490-493 support pocket, and pushed the contract 13 cents higher to settle at 506-4. Friday’s trade wiped away most of Thursday’s gains, but bulls were able to successfully hammer out a bottom (for now) by closing out the week 2 ¼ cents higher, settling at 494-4. In next week’s WASDE report, market participants will be closely watching yield estimates very closely. Any reductions from the current 181 bushel per acre (bpa) estimate should be supportive for corn futures, but USDA has been historically reluctant to make any significant changes in the July report. Per today’s CFTC Commitments of Traders report, managed money funds are holding a net-short position of 18,209 contracts - a net change of -71,054 contracts from last week. Broken down, that’s 159,969 long positions and 178,177 short positions. While the net position is hardly indicative of the market’s direction moving forward, the net change may offer some insight. Selling pressure may persist following Wednesday’s WASDE report barring any significant yield reductions. 

Soybeans: 

After last Friday’s 77 ½ cent rally following the Planted Acreage report, the November soybean contract grinded continuously lower following Independence Day. On Wednesday, the November soybean contract closed 9 cents lower, settling at 1355-00. Weakness in the November soybean contract this week was certainly spurred by the immediate spike in the bean:corn price ratio, which was pushed to 2.75 after the Planted Acreage report, after it had been hovering between 2.2 and 2.4 since the beginning of January. Historically, it is very rare for this ratio to push close to 3. November soybeans closed the week 26 cents lower, settling at 1317-6. Like corn, traders will be keeping a close eye on yield estimates for soybeans as a result of the dryness in the corn belt, though conditions have improved marginally over the past two weeks. Managed money funds are still holding a net-long position of 89,142 contracts, which is 10,388 fewer contracts than their reported position last week. Broken down, that’s 123,316 long positions and 34,174 short positions. Fundamentally, the outlook for soybeans is more bullish than corn, but the contracts will likely continue moving in unison due to the recent expansion in the historical bean:corn ratio. Wednesday’s WASDE report will likely provide additional insight into the longer-term direction of the contract. 

   

Wheat: 

Although Planted Acreage did not provide as much fervor as it did for corn and beans, volatility in the September Wheat contract was not remiss. The September wheat contract moved sharply higher on Wednesday on news that Ukrainian officials were preparing for a Russian attack on the Zaporizhzhia nuclear power plant. As a result, the September wheat contract closed 32 cents higher than Monday’s close, settling at 674-2. Interest in the Russia-Ukraine narrative waned through the remainder of the week, and prices declined as a result. By Friday’s close, wheat had given back nearly the entire rally from Wednesday, and closed at 649-4, up just ½ of a cent on the week. Funds continue holding a sizable net-short position of 54,006 contracts - adding 1,838 new short positions from last week’s report. Broken down, that is 58,733 long positions and 112,739 short positions. The upcoming WASDE report should not bear any major surprises to the wheat complex, and price action will likely continue following corn and soybeans. 

 

---

Sign up for a 14-day, no-obligation free trial of our proprietary research with actionable ideas!
Free Trial Start Trading with Blue Line Futures Subscribe to our YouTube Channel
Email info@Bluelinefutures.com or call 312-278-0500 with any questions -- our trade desk is here to help with anything on the board!

Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Grains

Like this post? Share it below:

Back to Insights