Grains were Up in the Overnight Session

Grains were up in overnight trade after yesterday’s reversal of fortune in the wheat market. Outside markets saw S&P futures getting closer to the psychological 2,000 point market while crude oil held on to slim gains. The US dollar was slightly lower following Thursday’s sharp move lower.

Wheat found strength on Thursday gaining nearly 10 cents a bushel. There has been considerable trade in world wheat over the last several weeks with Egypt, Saudis, Taiwan, and Japan active. There is also a round of weather forecasts that look at the hard wheat belt as turning a little dry. Funds are record short in wheat, which could lead to a sparked rally if we can get above $4.80 on KEN6.

Soybeans posted modest gains on Thursday, coming off front-month support of $8.55. The Brazilian real is extending has been rallying of late, pushing it to multi-month highs, which creates less incentive for farmer sales in Brazil when the real is firm vs. dollar.

The corn market made another attempt at pushing into new low ground, but ultimately came up short and closed higher. Not being able to take out the January lows is a good sign for the bulls. Weekly USDA Export Sales were robust at 1.098 MMT. The break in US corn values has clearly stimulated more interest, and we would not be surprised to see another good sales week in the next report. Brazil corn export offers are extremely limited until July days.

Crude oil met selling pressure yesterday as it got closer to the highs of January around the $35 to $36 range. Traders will look at the Baker Hughes rig count at noon CDT for more signs that US drillers are curtailing production. Last week’s rig count was at 400, off from 413 in the previous week and 498 in the previous month.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

—Kevin McNew