Markets Caught Between Oil and Rain
Presented by Heartland Investor Capital Management Inc. CTA
Grains and Crude Oil:
Crude oil briefly broke under $90 before recovering most losses, helping stabilize grain markets.
Iran uncertainty continues supporting energy prices and limiting pressure on corn and soybeans.
Soybeans avoided larger losses despite outside market weakness.
South America Corn Weather:
Dryness continues across key Safrinha corn areas in Mato Grosso and Mato Grosso do Sul.
Forecast models remain mostly dry through early June.
Brazil’s corn crop estimates may continue shrinking by 7 to 10 million metric tons.
Domestic ethanol and livestock feed demand in Brazil continues increasing.
Canada Canola and Spring Wheat:
Wet conditions across Alberta and Saskatchewan continue delaying canola and spring wheat planting.
Canola prices pushed higher again with technical targets near the $787 to $800 range.
Cool temperatures and delayed planting remain supportive short term.
U.S. Weather Outlook:
North Dakota received light rainfall but hot temperatures and limited follow up moisture remain concerns.
Western spring wheat areas stay mostly dry in forecasts.
Eastern Corn Belt dryness is developing but remains manageable for now.
Nebraska and portions of Kansas continue receiving beneficial rainfall.
Corn Market:
December corn held trend line and 100 day moving average support.
Strong export demand continues supporting prices.
Potential Chinese tariff reductions and lower U.S. carryout projections could support a summer rally toward upper $4 prices.
Soybeans:
Soybeans tested support but held together relatively well considering outside market weakness.
Crush margins remain historically strong near $5.
November beans continue attempting to form a corrective low despite pressure from potential acreage increases.
Wheat:
Chicago and Kansas City wheat remain in corrective declines following recent rallies.
Kansas harvest is advancing rapidly and could create an earlier than normal seasonal low.
European wheat areas are also turning hot and dry, supporting longer term bullish potential.
Crude Oil and Fertilizer:
Crude oil found support near the 77 day moving average around $90.
Shipping disruptions through the Strait of Hormuz continue supporting elevated energy prices.
Fertilizer availability and pricing remain concerns ahead of Brazilian soybean planting season.
Cattle Market:
Live cattle and feeder cattle continue showing technical signs of topping action.
Feeder cattle completed another wave lower with rallies now facing resistance near 356 to 357.
Markets continue adjusting lower following one of the strongest bull runs on record.
Provided by:
Eugene Graner,
Heartland Investor Capitol Management, Inc., CTA
(A separate entity from Heartland Investor Services)
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