The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Ukraine is Heating Up
May 05, 2014
Corn, soybeans and wheat all moved higher this morning with corn up 4 1/2, soybeans up 1 ½ , wheat up 14 and Kansas City Wheat up 14.
Soybeans continued its bounce early in this morning’s session on technical buying after prices stabilized on Friday around the $14.60. Soy oil and meal also traded higher in the early part of the session, but have backed off into the morning break.
Weather continues to be a stark contrast throughout the U.S with the Midwest continuing to get showers while the Southern Plains desperately needs moisture to salvage the remainder of this year’s wheat crop. Triple digit temperatures in the southern plains pushed wheat prices higher this morning as crops were stressed from Central Kansas to Northwest Texas. Temperatures have backed off today in that region but another hot blast is expected on Tuesday before more normal temperatures return to the area.
In the Midwest some spotty showers occurred over the weekend near the great lakes and around MN and IA. However, warmer weather possibly into the 80’s this week will keep planters moving at a robust pace and will most likely continue to cap the gains in the corn market. The market will be watching last week’s planting progress very closely in the Crop Progress report released at 3 PM CST later today.
Chicago wheat futures gapped 5 cents higher to start the overnight session as the poor state of the domestic crop and violence in Ukraine’s largest port city both worked to bring buyers into the market. This weekend’s violence in Odessa, Ukraine is some of the worst violence seen in western Ukraine and represents a shift in a conflict that has largely been focused around the Crimean Peninsula in eastern Ukraine. While Ukrainian traders report few disruptions in the port city of Odessa following the unrest, this type of headline that will make some traders question whether or not Ukraine can export the 9.5 million tonnes in the current marketing year projected in the April USDA report.
Traders will be closely watching this afternoon’s crop progress and condition ratings. Last week’s report showed 37% of Kansas wheat and 65% of Oklahoma wheat rated poor to very poor. Little improvement is expected in national wheat ratings after a week of limited moisture and high temperatures across the southern Plains.
Corn futures are drifting higher, up 2 – 4 cents across the board this morning on light news and technical buying. Both the July and December 14 contracts are finding technical support on the daily chart from long term trend line support. If you have questions or need assistance adding trend line support to your trading platform please contact the office, 877-472-4607, and we would be happy to assist.