Grains and oilseeds are sharply higher on Friday morning following the overnight session. The U.S. dollar is higher. Crude oil is trading at the highest in nearly two years amid the escalating conflict between the U.S. and Iran. Stock futures traded sharply lower again and are testing support levels from Tuesday’s low.
CORN
Corn futures rallied sharply higher on Thursday, with the May contract posting gains of 9.75 cents to close at $4.53 ½. Follow-through buying took prices higher again overnight, with futures quickly approaching resistance levels around $4.60.
The sharp rally in crude oil futures continued to be the driving force for the grains, with spot futures approaching $90 a barrel.
The USDA will release its March WASDE report on Tuesday. Minor changes are expected for the U.S. balance sheets. We will release the pre-report survey estimates later today.
Ukrainian port authorities said a Russian drone hit a Panama-flagged vessel in the Black Sea this week, signaling renewed risks to grain shipping in the region amid the ongoing war.
Argentinian farmers have begun harvesting early-season corn, with progress at 7.2 percent. Crop conditions remain mostly favorable, with 87.4 percent of the late-planted crop in good/excellent condition.
SOYBEANS
Soybean futures resumed their rally on Thursday after trading 9.75 cents higher to close at $11.79 ¼. Prices posted fresh highs overnight amid ongoing strength in the crude oil market that seeped into soybean oil.
Soybean oil prices are set for their longest streak of gains in more than a decade, which has helped support the complex over the past couple of weeks.
Brazil’s soybean exports were a record for February. The country’s trade ministry reported that shipments totaled 7.11 MMT, up nearly 11 percent year-over-year. China was the top destination.
Argentinian soybean conditions stabilized over the past week following recent rain. Thirty percent of the crop was in excellent or good condition, up on percentage point from the previous week.
A private firm in Brazil raised its forecast for the country’s soybean crop, declines from other private forecasters. Agroconsult forecasts output at 183.1 MMT, up from the previous estimate of 182.2. The firm said estimates have improved for most states despite challenging weather.
WHEAT
Wheat futures have benefited from the recent rally in the corn and soybean markets. The May Chicago contract rallied 15.50 cents on Thursday to close at $5.83 ¾ after successfully holding above the 200-day moving average.
Prices rallied again overnight and are approaching resistance levels from last week’s high near $6.04.
The United Nations Food and Agriculture Organization forecasts global wheat output 3 percent lower this year, primarily due to lower wheat sowings in major producers, including Russia, the EU, and the United States.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.