Grain Prices Are Trending Higher: What Bulls Should Watch This Week

May corn (ZCK26) futures on Friday rose 4 3/4 cents to $4.67 1/4 and closed at a 10-month high. For the week, May corn was up 6 3/4 cents.May soybeans (ZSK26) fell 2 cents to $12.25 1/4 but for the week rose 24 1/2 cents. May soybean meal (ZMK26) rose $2.50 to $322.70 on Friday, closed at a 3.5-month-high, and for the week was up $5.50. May bean oil (ZLK26) rose 2 points to 67.44 cents and for the week was up 86 points. May soft red winter wheat (ZWK26) on Friday rose 15 1/4 cents to $6.13 3/4 but for the week was down 3 cents. May HRW wheat (KEK26) rose 16 1/2 cents to $6.30, nearer the daily high and closed at a nine-month high close. For the week, May HRW was up 6 1/2 cents. 

Corn and Soybean Markets Leading the Charge Higher

May corn futures saw the fourth consecutive technically bullish weekly high close on a Friday, suggesting follow-through price strength early this week from the chart-based speculators. The recent gains in corn, soybeans, and to a lesser degree, wheat, have been especially impressive given the keener risk aversion in the general marketplace amid the war in Iran.

Corn and soybean traders will continue to closely monitor growing conditions for South American crops. While there are some dry spots in Brazil and Argentina corn and soybean regions, no major production losses are expected.

The late-March USDA planting intentions report is coming more into focus, with spiking fertilizer prices and availability bringing a new twist for corn. There will potentially be fewer corn acres this year, which would mean more soybean acres. While acreage shifts are likely to some degree, they may be limited by rotational practices and general preferences toward growing corn over soybeans.

The soybean and bean oil markets last Friday saw some needed chart consolidation following their recent good gains. Friday’s technically bullish weekly high close in soybean meal futures is also encouraging to the soybean market bulls. 

Soybean traders are keeping a close eye on shipments out of Brazil. Some soybean cargoes from top exporter Brazil have failed to clear the country’s own sanitary inspections, raising concerns about potential disruptions at a crucial time for trade with China, Bloomberg reported. A number of cargoes didn’t pass sanitary checks held at ports in the past few days, according to people familiar with the issues, who didn’t want to be identified as details are not public, said the report.

The framework for President Donald Trump’s summit meeting with China’s President Xi Jinping was set to be mapped out this weekend as negotiators meet to discuss issues such as tariffs, fentanyl, and Taiwan. Reports said more China U.S. soybean purchases may also have been on the agenda.

Wheat Futures See Support from Surging Corn, Soybean Prices

The winter wheat futures markets rallied Friday amid gains in crude oil futures and despite a stronger U.S. dollar index that hit a 10-month high Friday. Friday’s technically bullish weekly high closes in May SRW and HRW futures set the table for follow-through chart-based buying from the speculators early this week. Gains in the corn futures market last week are also supportive of the wheat markets.

Weather reports say that in U.S. hard red winter wheat country, precipitation through the next 10 days will continue to be limited, which will further raise concerns of dryness as the winter wheat crop sees expected periods of unusual warmth. 

Overall supply and demand fundamentals for winter wheat still lean bearish, as rains in the eastern U.S. helped bolster soil moisture across the heart of SRW country as the crop exits dormancy. Drought has eased somewhat in the Plains, but precipitation was spotty overall. 

Wheat traders will also closely scrutinize the late-March USDA planting intentions report.

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