Grain Markets Commentary

walshtradingGeneral Commentary, Grains


The corn market worked higher all day. The impetus today was the Russian suspension of its participation in the UN brokered export agreement with Ukraine. This situation may well be fluid and could change at any minute. However, at present this is a friendly input. In addition, parts of Argentina remain to dry. This is pause for planting concerns and will lead to potential shifts to soy plantings. The US harvest is moving along at a relatively normal pace with yield expectations in or around the current USDA. The tech picture in corn. Currently the nearby contract is broad based sideways with a close today above the 14, 21 day moving average.


The wheat market traded sharply higher today. The market reacted to concerns over the Russian suspension of the UK brokered export agreement with Ukraine. The Chicago, Minn, and KC wheat all reacted to the news and closed sharply stronger eyeing all news coming out. In addition, concerns from Argentina with dry weather persisting has the US as an export option in the future.  The tech picture in wheat. The Chicago nearby contract gapped higher today. In addition, the market closed above the 14 and 21 day moving averages. This could indicate a near term low is in place on the daily. The technical picture could lead the trade in the near term.


The bean market closed higher today. The beans were an early follower to the corn market. However, concerns from the Black Sea, especially as it may relate to oil seed exports sent bean oil on a strong day. This carried both beans and meal higher. The soy complex may prove to be a follower. The current weather situation in Argentina could potentially add more bean acres in the long run. This is not what the market is focused on today. The bean oil market was again the leader. The current domestic usage is high. This should continue given the concerns over green energy. The South Amertican situation for Argentina overall remains dry in key areas. This at present is more of a corn concern. The tech picture in beans. The bean market has been in a broad sideways market. The beans closed above the 14 and 21 day moving average. The meal closed above the 14, 21 day moving average. The bean oil has been on an uptrend with oil share gaining almost daily. The market is above the 14, 21 day moving average.


Nov beans / Dec products 3.40 gpm, oil share 46.1%


The cotton market continues its steep decline. There are a few concerns in the marketplace at present. The largest of them is the Chinese shut downs and what that will do to global demand. It is currently seen in mill demand which is in a slowdown. This is a global problem that is not easily fixable given the covid environment. Thoughts some US demand will be cancelled from global buyers also is contributing. This is not at present related to stocks. However, when this climate changes is anyone’s guess. The tech picture in cotton remains negative with the market closing day after day below the 14 and 21 day moving averages. This is a market that is entrenched in a bear down. No time to pick bottoms.


The Cocoa market remains in a sideways trend. There are no comments today. The tech picture in cotton at present has the market below the 14, 21 day moving average.


The sugar market is closing the moth close to where it began. The market at present is absorbing the recent weakness in energy markets overall due to the Chinese slowdowns, and really the global marketplace. The thought here is that the Brazilian market may slow Ethanol demand. It is worth noting however, the share of sugar for ethanol is increasing year over year. In addition, the Brazilian election results may yield a short-term lift for Sugar as well. The tech picture for sugar is not overall friendly with the market below 14, 21 day moving averages on the daily and weekly charts as well. A bounce may be due, however it most likely will not affect the macro technical picture.


The cattle market has been in a very nice upswing supported by strong fundamentals. The cash price has been in a supported upswing steadily moving higher. This trend may well continue. At the very least stay steady. Having said this look for a small pull back in the Dec to the 151 level. This should be supported. A move below that is good support. The feeder market has been more of a follower which has allowed the LC / FC spread to remain tight. The FC in the deferred may be poised for a bit more of a pullback which represents opportunities. Patience may be rewarded. The tech picture in live cattle has the market above the 14, 21 day moving average. The tech picture in the FC has the market slightly below the 14, 21 day moving average. This agrees with the fundamental thoughts.


John J. Walsh
President, Walsh Trading, Inc.

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