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May 17th- Closing Market Commentary

05/17/2022

Grains closed varied:

July Corn -8 3/4 cents/bu (8.00 3/4)

July Soybeans + 21 1/2 cents/bu (16.78)

July Chi Wheat +30 cents/bu (12.77 1/2)

CDn $ +0.00070 (77.940 cents)

WTI Crude Oil -1.80/barrel (112.40)

Markets were uneventful, not much to write home about today. Wheat’s main driver is the India export ban, while soybeans are supported by the palmoil story, and corn is down on better than anticipated planting progress.

Wheat is also in a very unique technical spot right now as wheat futures hit $12.84/bu at their peak today which is a level reached only 5 times in history before.


Most news stories applicable in the movements we observed today are residual, indirect news pieces that one way or another impact futures prices. Some interesting discussions on these topics I have seen on Twitter today include:

  1. There are less than 10 days from the prevented plant date for corn in North Dakota. Currently there are only 4% of corn acres planted in that state. (Bullish Corn?)
  2. In addition to concerns of North Dakota, there is correlation with final corn yield and week 19 planting process- data that is not favourable for the U.S’s current status. (Bullish grains and oilseeds?)
  1. India eased their hard export ban, allowing overseas wheat shipments that are awaiting customs clearance, while also allowing exports to continue to Egypt. These exceptions to the ban are having traders’ question just how bullish this wheat news story truly is.  (Bullish/Not as Bullish wheat?)
  2. Ukrainian weather is favourable for crop growth, however, despite good potential there are many unanswered questions. Will the crops get the treatments they need for good yields, will the fields be able to get harvested? Where will the grain go once it is harvested? (Corn and Wheat Bullish or Bearish?)
  3. Indonesia has ceased exports of palmoil to cope with high prices domestically which is causing an uproar in the country and putting more pressure of global edible oil stocks. Palmoil stories are linked to the price of soybeans as a result of soyoil. (Bullish soybeans?)
  4. The UN is reportedly negotiating with Russia regarding allowing Ukraine to export grain from its ports and Russia/Belarus could export potash. – apparently talks are not going very well. (Bullish wheat and corn?)
  5. Sweden announced that it has plans to follow Finland and apply for NATO membership. During the cold war, Sweden and Finland acted as a neutral buffer between Russia and the East. By affirming loyalties with NATO, this has potential to upset Russia and further intensify conflict. This has an unknown potential impact on the overall stock market including grains. (Bullish or Bearish everything?)
  6. La Nina is expected to stick around until end of 2022/beginning of 2023. This causes crop problems in Argentina and southern Brazil as well as in the southern U.S. Plains due to climate patterns affected by surface water temperatures.
  1. Weather in the Midwest is forecasted to have a spattering of rain within the sunshine that will slow planting, but benefit planted crops.

Lots happening in the world that is shaking out into the prices we are seeing today and factoring into a volatile market (see differences in highs and lows).

Funds were thought to have been mixed. Corn was thought to be a seller, while soybeans and wheat were buyers.


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