Minneapolis Wheat is still in Sell Signal
On this latest round of Sell Signals, Minneapolis wheat is the only crop market with an active Sell Signal today. Winter wheat prices slid lower this week, while spring wheat held mostly steady near its recent high. The decline pulled both Chicago and KC wheat out of Sell Signal, however prices are attempting to rebound today, so it is possible the winter wheat signals could resume in a day or two.
On this round of Sell Signals, we recommend selling a 20% increment of old crop grain and a 10% increment of expected new crop production. This recommendation applies to corn and all three wheat classes.
Other
Rice remains in an Extended Sell Signal. Rice prices have now been chopping back and forth at this higher range for two weeks, allowing producers plenty of time to make aggressive sales. Overnight, prices eased back towards the lower end of the recent range.
Cotton prices have fallen to multi-month lows this week, while sugar prices have been trading sideways near recent lows for two weeks. Both remain in Buy Signals today, though the sugar Buy Signal will likely end in the next couple days.
Energy prices were lower on Wednesday, with crude oil dropping to their lowest level in nearly two months. WTI crude fell below $80/barrel. Heating oil prices also dropped sharply lower. Both crude and heating oil are in Buy Signals today. Check on your local prices for fuel buying opportunities.
Outside Markets
Equities: Stocks were mixed and generally lower Wednesday after the Federal Reserve announced it was leaving interest rates where they have been all year in their stalemate against inflation. The Fed’s announcement surprised no one as the financial markets have nearly given up hope of any reductions this year let alone the three that had been anticipated.
The news sent the S&P 500 and Nasdaq slightly lower while the Dow Jones enjoyed a modest increase. Wednesday’s batch of corporate earnings led to declines for CVS and Starbucks. Chipmaker ADM and hardware producer Super Micro Computer helped weigh down the entire tech sector.
Dollar: The Federal Reserve board members weren’t the only financial regulators making news Wednesday. The Bank of Japan (BOJ) finally stepped into the ring on behalf of the faltering yen. The BOJ began buying up the yen on the world currency market, pushing its value up against the dollar to around 154.0. The Dollar Index, however, reached a 12-month high of 106.3.
Treasuries: While interest rates made the headlines on Wednesday, the bond market was equally focused on the Fed’s announcement that it was easing its quantitative tightening program beginning June 1. Analysts said the move, which drops more maturing bonds from its balance sheet, means the United States will have to borrow less money. The news sent Treasury yields lower on Wednesday with the 10-year down 5 basis points to 4.63% and the 2-year off 9 points to 4.96%.
Energies: A large increase in U.S. crude supplies knocked futures sharply lower on Wednesday. June WTI fell to $79 and below $80 for the first time since mid-March. The Energy Information Administration reported crude stockpiles at 461 million barrels, the highest since last summer, at the same time refinery utilization dropped to 87.5%.
Meanwhile, Reuters reported that China has been importing less crude. Citing data from the research firm LSEG, Reuters said China’s imports in April were 26.89 million barrels per day (bpd), down from 27.33 million bpd in March.
Metals: June gold futures rallied on the Fed’s rate announcement Wednesday. June finished at $2,311 after a brief dip below $2,300. The World Gold Council provided additional encouragement by announcing an increase in world demand for gold during the first quarter. July silver was higher Wednesday at $26.74 while July copper slipped to $4.54.
Livestock: Sellers dominated the live cattle market on Wednesday, sending June futures around a dollar lower and below $174 in choppy trading outside of the previous day’s range. Trading did remain in a wide range around the moving average of $175. Some of the recent support for cattle prices appeared to ease when the USDA reported that pasteurization was proving effective against avian flu in dairy products.
August feeder cattle fell sharply at the opening and closed nearly $4 lower and below $252. June hogs had been consolidating this week, but the bottom end of the range extended down to $100.60 on Wednesday as technical selling exerted its influence.
Live Cattle: Cash prices were seen around $185 while actual sales to confirm the estimate were harder to come by.
The slaughter at midweek totaled 360,000, down from 363,000 a week ago. The choice cutout was $293.54 late Wednesday compared to the 5-day average of $296.34, and $5.47 above select with Memorial Day on the horizon.
Feeder Cattle: The Oklahoma auctions reported a modest price hike in Ada Wednesday but lower prices in El Reno with demand possibly more muted than last week. Severe weather in the Plains may have slowed things down; some additional rainfall and below-normal temperatures were in the forecast.
Lean Hogs: The slaughter was just under 468,000 on Wednesday, bringing the total for the week to 1,438,000 compared to 1,451,000 a week ago. Cash prices were a bit softer and above $92, although the Eastern Corn Belt was pegged closer to $90. The cutout was down less than a dollar late Wednesday and just under $98, but the belly primal fell more than $10 to $107.90.