Corn 5 to 7 higher Dow Jones 825 lower (49,691)
Soybeans 10 to 17 higher Crude Oil $17.15 higher (108.16)
Wheat 12 to 14 higher Diesel 57 cents higher (4.1940)
Basis Flat/Lower
The opening Sunday night trade has been wild as beans and wheat have pushed to sharp gains with corn following to post solid gains. With no weekend progress in re-opening the Straits of Hormuz and OPEC cutting back daily oil production, crude oil futures opened sharply higher and now are trading over $100 a barrel for the first time since 2022. While the grains, soy and energy markets are sharply higher, the world equity markets are down sharply with another night of 1-2% losses as investors fear the long-term consequences of significantly higher energy prices.
Correction:
No one likes higher fuel prices, but farmers benefit more when fuel rallies because it rallies corn and beans. The relationship between diesel and bean oil and gas and ethanol was noticeable. Look at it this way, for every 1000 gallons of diesel used annually on farm, this week cost you $1500, for every *10,000 bushels* of old crop corn you have stored this week, the rally (so far) made you $1700, and for every new crop bushel you made $2000. The bean math is +$4500 and +$2500. It is hard to have both high corn and bean prices and low fuel prices (Covid is the only example) as the renewable fuel industry has grown.
The bullish effects of skyrocketing crude oil prices have been obvious for the corn and bean markets while the closure of the Straits has pushed wheat even higher (as a %) than corn and beans. The rallies are adding dollars to every farmer’s bottom line, but these gains will disappear as quickly as they appeared, so caution is merited. Please continue to reward the rallies with old and new crop sales in all three markets because the markets are just an announcement away about the Straits re-opening or a cease fire, to put in brutal reversals.
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About Jody Lawrence
Jody Lawrence has been in the commodity brokerage and agriculture marketing business since 1992 and started Strategic Trading Advisors in 1999 and runs it today with his son Brady. The daily market comment his company publishes has over 7000 subscribers in 33 states and 3 countries and provides a concise overview of the world markets with ideas on farm hedging and marketing. Jody also travels the country giving 60-70 marketing meetings a year through his 22-year strategic partnership with Helena Agri-Enterprises.
About Brady Lawrence
Brady Lawrence is an Agriculture Market Specialist and Financial Advisor that focuses on commodities markets, futures and options brokerage, and helping individuals and families plan for retirement and their financial futures. Brady joined Jody at Strategic Trading Advisors in 2018 after college and supports the market research and brokerage sides of the business.