Grains close the week with mixed to lesser effect

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Grains close the week with mixed to lesser effect

The soybean complex was mixed to mostly lower on Friday, with most areas trading moderately lower for most of the day before almost breaking even at the close. May soybeans closed 1/2 cent lower at $16.68 and July beans closed 1 1/2 cents lower at $16.45 and 3/4. May Bean Meal closed $2.90 higher, recouping most of Thursday’s losses. May Soybean Oil closed 234 points lower at $72.29. Soybean futures saw movement in spread trading with downside movement in nearby contracts. Soybean meal is trading higher, recouping most of Thursday’s losses so far. Soybean oil is lower considering the global demand picture. Crude oil prices are trading higher which could support soybean oil into the close. Export demand for US soybeans was mostly positive this week, which limited the downward pressure on the market. Light rains in South America could impact the soybean complex but will likely have a larger impact on the corn market. Traders will be turning to US weather over the next two weeks to monitor planting conditions. US soybeans are competitively priced in the global market and well positioned for trade as China announced yesterday that it intends to continue importing products despite isolated COVID-related lockdowns. Long-term Chinese demand is in question with higher planting expectations for trading partner. The loss of the Ukrainian sunflower crop remains optimistic, especially for soybean oil.

Corn futures were mixed with losses in nearby contracts. Corn closed 12 3/4 cents lower at $7.41 and 3/4 and the July contract closed 6 1/4 cents lower at $7.12 and 1/2. The market saw slight downward trading overnight which carried over into the session. Corn futures continue to bob, bouncing between Russian and Ukrainian peace talks and Russian aggression in the Black Sea region. Trade expectations with China remain uncertain amid trading partner COVID lockdowns and shifting global grain availability. The market is also watching the weather in South America as the safrinha crop in Brazil and Argentina needs moisture. The long-term prospects for the US corn market remain strong given the expected loss of Ukrainian corn exports. That opens the door for more US exports, particularly to China. Strong ethanol supply keeps margins thin amid limited demand as drivers travel less and see gas prices rise. Markets will be watching reactions to the Federal Reserve raising short-term interest rates. Expected frosts in Texas, which already grows nearly a quarter of that state’s corn crop, could have a minor impact on the market. Harvest conditions and planting weather are becoming a bigger factor in the market as we head into April.

Wheat futures maintained their wild trend, closing sharply lower on the day as they tracked humidity in the prairie states, which were hit hard by the winter drought. May Chicago led the way down – shedding 34 and 1/4 cents at $1063 and 3/4, May Kansas City closed 21 3/4 cents lower at $10.70 and 1/2, and May Minneapolis closed 18 3/4 cents lower at $10.60 and 1/4. The market continues to monitor developments in the Russian-Ukrainian conflict. The complex has been on a whirlwind roller coaster ride, trading significantly lower on the rumble of peace talks and significantly higher on Russian advances. Some traders may pull out of the market towards the end of the week to clear their positions over the weekend. May’s Chicago contract led the way down, losing almost 30 cents after midday. Grain markets across the board continue to have a few wild cards that are difficult to explain: the impact of inflation on grains and the impact of a Federal Reserve raising short-term interest rates for the first time since 2018. Grains close the week with mixed to lesser effect

Jaclyn Diaz

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