Fund selling takes grain prices below midday chart support | Tuesday 5 July 2022

Corn and soybean markets are down sharply again today as fund selling drove prices below chart support.

At this hour, July corn prices are down 19 cents. Corn prices fell in December by 30 cents. Soybean futures for July are down 37 cents. Soybeans for November is 73 cents less. Wheat futures were lower, with wheat prices on the Chicago Board shedding 34 cents. KC wheat is down 36 cents, and Minneapolis wheat is down 35 cents.

Three major factors are bombing the corn and soybean markets.

1. There has been a sharp decline in the prices of palm oil, canola oil and soybean oil. The rise in vegetable oil prices eventually led to a fall in demand. Now we need to know the price level at which demand will start to improve. Soybean oil prices are now down 35% from the highs recorded in early May.

2. China has canceled some (five to eight) expensive shipments of old soybeans.

3. There was a massive liquidation of funds as the stock markets, crude oil and grain markets fell sharply on “risk off day”.

In the livestock market, August pigs were up $2.65 at $105.62. August cows were down $1.00 at $133.60, and August feeders were down 65 cents at $173.85.

In overseas markets, crude oil is down $9.20 a barrel. The US stock market is under pressure again with the S&P 500 down 56 points, and the Dow down 560 points.

Grain markets fell sharply after the three-day weekend: 8:45 am

Money continued to sell off and the extended outlook became wetter in most of the Central Corn Belt. On Monday, global grain markets slumped.

Corn prices in July fell 19 cents. Corn prices fell in December by 25 cents. Soybeans for July traded down 38 cents, and soybeans for November were down 46 cents. Wheat futures are down 3 to 15 cents.

The key to watch in today’s USDA Crop Progress Report will be crop conditions. I’m looking for corn and soybean ratings to go down 1% to 2%.

On China’s Dalian Commodity Exchange, futures contracts for corn and soybeans fell. On the Mativ Stock Exchange in Europe, wheat futures were down 18 cents a bushel at $11.12.

Livestock futures are up this morning. August pigs were up 32 cents at $103.30. August cattle were up 7 cents at $134.62, and August feeders were up $1.65 at $176.22.

In early trading, the US stock market fell with the Dow Jones down 488 points, and the US dollar rose. Crude oil prices are now down sharply by over $4 a barrel.

Worldwide, China’s stock market fell 0.1%. Japan rose 1.1%. European shares fell 1.9%.

For a free trial of The Kluis Report including market updates three times a day and newsletter on Saturday, visit kluiscommodities.com, call 888-345-2855, or email info@kluiscommodityadvisors.com.

About the author: Al Kluis has been a commodity advisor and broker since 1976. Kluis is an Introduced Broker with Wedbush Futures and writes a column, your profit, which appears in every number of successful farming magazine. Clowes has published two books on commodity trading and they are commonly cited in major publications including The Wall Street Journal. He is also a featured speaker at nationwide commodity conferences. Clowes is a frequent market analyst for Linder Farm Radio News Network. Chloes, a farm boy in Minnesota, earned his degree in agricultural economics from the University of Minnesota in 1974, after which he became executive director of the Minnesota Soybean Association before entering the markets full time. His family still farms in southwestern Minnesota, and Kloes enjoys helping out with fieldwork when markets allow.

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