Grain prices opened with mixed ups and downs on Tuesday, but quickly rose, continuing Monday's risky rise.
Kent Beadle, an analyst at Paradigm Futures, said wheat continued Monday's gains, and wheat continued to play a leading role due to the crop's lower ratings, combined with weather and war premiums.
The US Department of Agriculture reports that the yield of winter wheat crops in the US is 50%, down 5% from last week, and an increase of 3% to 16% in poor to very poor categories. Most of the deterioration occurred in hard red winter wheat crops, and farmers experienced high temperatures, high winds, and even frosts. Oklahoma saw the biggest decline in wheat yield, by 11%, and Kansas, the top producer state, by 7%. Meanwhile, conditions in soft red winter wheat growing regions have improved, and the yield rate in Illinois has increased by 5%.
Beadle said that in previous forecasts, some arid regions will experience rainfall, but so far, earlier forecasts have been disappointing.
Globally, wheat production is also facing challenges due to dryness, low temperatures in the Black Sea and Australia and Europe. As a result, Paris/Matif wheat futures prices have been rising.
Beadle also believes that as the war in the Black Sea escalates, Russia is targeting critical food infrastructure in Ukrainian port areas, and the market has been increasing war premiums.
Corn and soybeans have been following the rise in wheat prices. On the technical chart, wheat and soybeans have also broken through the key moving averages. Kansas City wheat closed above the 100-day moving average and corn closed above the 50-day moving average. This has forced some speculative traders to make up short positions.
The planting schedule for corn and soybeans is 12% and 8%, respectively, above the five-year average, but recent rainfall in the cornfield, as well as the rain forecast for Thursday and Friday, may begin to attract the attention of traders.
Driven by bullish positions in the “Cows in Feed” report and continued stability in the stock market, live cow futures sought to extend gains.
Beadle said that pig futures followed the rise in live cow futures, and factors such as seasonal capital flows will help support the price increase. “I think hog futures may retest contract highs at some point, like in the past,” he said.