Market Thoughts 5/30/2022
July corn lost 1’4 cents last week to close at 777’2. Friday’s impressive recovery masked an otherwise bearish performance as corn broke through trendline/moving average support and traded down to 755’0 earlier in the week. July soybeans gained 27’0 cents to close at 1732’2. The July contract has added 150 cents in the past three weeks with the late February 1765’2 daily high in its sights now. July spring wheat clawed back 25’6 cents to finish the week at 1304’6. Wild times again this week with that contract falling all the way to 1239’2 by Wednesday morning before mounting a 66 cent recovery. Even after that bounce, spring wheat is still more than a dollar below its prior-week contract highs.
Corn struggled most of last week, looking the part of a commodity that had made a seasonal peak. Technical support noted last week was obliterated early with futures breaking through both the closely-watched 40 day moving average and the long term uptrend. Planting pace surged back to near the five year average and export sales were mediocre. China approved Brazilian corn for import and announced purchases, highlighting the fact that Brazilian corn is massively discounted to U.S. currently. Wheat also struggled, with the biggest concern not the news but the failure to react to it. A hard freeze for winter wheat and spring wheat planting progress way below expectations were two bullish stories that barely slowed wheat’s early week descent. Wheat found a bid between spillover support from soybeans and the realization a Ukraine/Russia wheat export deal isn’t imminent. Beans performed remarkably well given the absence of an obvious reason. Old crop export sales continue to impress but there was nothing unique in last week’s numbers. Surging energy prices no doubt helped and there is definitely some concern over bean planting pace.
Should be plenty to keep things supported this week. Trade continues to underestimate the severity of the northern Corn Belt situation and Crop Progress will almost certainly show ND/MN planting pace much lower than expected, with a widespread rain system moving through the area today/tomorrow. Tough to know what’s real but the Ukraine/Russia wheat deal continues to appear stalled out. Energies remain strong and the soybean chart looks bullish. Beans seem poised to make new highs this week and while we’re still inclined to think corn/wheat highs from two weeks ago hold that still leaves plenty of room to rally.
We’ve highlighted this in daily Price Signals reports but worth illustrating again - soybeans continue to rally with Price Signal moving higher but still well below Sell Threshold. Meanwhile, corn seemingly has nothing but bearish news but Price Signal has already collapsed to its lowest level in a year. This suggests beans have plenty of room to rally yet while corn has priced in its recent bearish news and will move higher if beans do.