Grain stays up at closing | August 23, 2023

Corn and soybean futures settled the day near the top end of the range. A close above the 20-day average ($4.95) in December corn tomorrow should give the bulls a dose of positive momentum to work with. November soybeans tested the 20-day average today and found willing buyers. The momentum indicators on November soybeans still favor the bulls even after lower closes on Monday and Tuesday.  

Wheat was able to close between 10¢ to 15¢ higher on the day across the three classes. KC wheat led the way higher, closing 15¢ higher while CBOT was up 12¢ and spring wheat was up 10¢. Traders are wanting to see a convincing move on the charts before declaring a low is in place. Momentum indicators are quietly turning higher in favor of the bulls.  

Livestock futures ended the day mixed as strength in the grain market likely took the wind out of the sails of the bull camp. August feeder cattle were down 47¢ while August live cattle were up 10¢. October lean hogs found support near the $78.50 mark and settled the day down $1.02.

If grain prices are higher tomorrow, look for livestock prices to trade similarly to today.  

In the outside markets, the U.S. dollar index ended the day down 0.15. Crude oil was down 75¢, and the stock market was able to maintain its strength throughout the day. The S&P futures were up 46 points just ahead of the closing bell. The U.S. treasury market saw a big rally on Wednesday. The 30-year treasury bonds were up more than 2 full points on the day.

There is an event in Jackson Hole, Wyoming, this week that concludes on Friday with commentary from Federal Reserve Chairman Powell. His comments could sway the markets if further rate hikes are implied.  

2:45 p.m. CDT

Grain stays up at midday: 11:41 a.m.

Grain futures are higher at midday. December corn is up 8¢ and November soybeans are up 12¢. CBOT wheat is up 11¢, KC wheat is up 14¢ and spring wheat is up 10¢. Traders are riding the rollercoaster of headlines as crop tour estimates continue to fluctuate. December corn needs to close above $4.97 (20-day average) before we are likely to see any major change in momentum. The key level for November soybeans is to close above the Monday high at $13.81. Traders are more concerned about soybean yields as the balance sheet is much tighter. 

August feeder cattle have turned quietly lower on the day, while November is quietly higher. Live cattle are up 35¢, while lean hogs have added to their losses from this morning are now down 70¢ to $1.15. If grains continue to show strength today, we should not be surprised to see livestock come under selling pressure.

After pushing to $103.90 this morning, the U.S. dollar index is now 0.20 lower on the day. Traders keep thinking the dollar will set back and test at least minor support levels, but the bull trend has been tough to break. 

Crude oil has rebounded after breaking to three-week lows earlier today. A higher close today could indicate the crude bears have run out of gas. The stock market is on the highs of the day and closing in quickly on the highs from yesterday. A close above yesterdays highs could trigger further momentum buying in the coming days. 

11:41 a.m. CDT

Grain starts day quietly higher: 9:06 a.m.

Grain futures are quietly higher this morning after trading mostly lower overnight. December corn futures are up 4¢, November soybean futures are up 1¢. CBOT wheat is up 2¢, KC wheat is up 3¢ and spring wheat is up 1¢.  

Traders are gearing up for reports from crop tours taking place. Although the comparisons made from year to year are important, the variability across the Midwest this year appears to be higher than normal. One of the big reasons for that variability is the hot, dry conditions experienced in June. Agronomists have voiced concerns about how the June weather impacted corn more than soybeans.  

Livestock futures are mixed this morning. Feeder cattle are up 35¢ while live cattle are up 25¢. Lean hog futures are down 60¢. Traders are growing more concerned about the outlook in China and possible slowdown in exports if economic conditions deteriorate further.  

The U.S. dollar index pushed to the highest level since June 6 this morning. The dollar index has rallied nearly 5% in the last month. If this trend continues, it will likely weigh on U.S. exports. Crude oil is trading lower this morning. The bears picked up momentum after breaking below the prior three-week low early today. The next major level of support is down another $2 from current prices.

9:06 a.m. CDT

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About the Author: Bob Linneman is a commodities broker with Kluis Commodity Advisors. Linneman grew up on a diverse farm in eastern South Dakota. Between milking cows, managing a beef herd, and farming various crops, he experienced many aspects of agriculture firsthand. After graduating from North Dakota State University with a degree in business, he moved to Hawaii with his wife. There he was an associate portfolio manager for a fixed income firm that managed $2 billion in assets. After nearly two years in Hawaii, he moved back to the Midwest and began his career in commodities. Linneman is licensed as a Series 3 and Series 30 commodity broker.

Editor's Note: The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance – whether actual or indicated by simulated historical tests of strategies – is not indicative of future results. Trading advice reflects good-faith judgment at a specific time and is subject to change without notice. There is no guarantee the advice given will result in profitable trades.