U.S. farming accelerates, CBOT grain futures show divergence between bullish and bearish trends

On May 7 (Wednesday),Regular foreign exchange app the Chicago Board of Trade (CBOT) grain futures market continued its volatile trend. Influenced by the accelerated U.S. spring planting progress, global trading dynamics, and position adjustments, major agricultural products showed mixed trends: corn and soybeans faced pressure, wheat found support, while soybean oil and meal experienced weaker fluctuations.

Corn: Supply Pressure and Bearish Sentiment Dominate

CBOT July corn futures closed at $4.55-1/2 per bushel, up slightly by 1-1/4 cents, but remained near a one-month low. USDA data showed that as of May 5, U.S. corn planting was 40% complete, slightly above the five-year average. Dry weather in the west boosted the planting pace, while rain in the east did not pose significant obstacles.

Although South Korea purchased 332,000 tons of feed corn, it did not significantly boost U.S. corn export demand. The expectation of a Brazilian bumper harvest continued to suppress prices, turning market sentiment bearish. On May 6, commodity funds increased net short positions by 1,500 contracts, bringing the five-day total to an increase of 21,500 contracts, suggesting short-term downward pressure remains.

Trend Prediction: Corn futures are expected to fluctuate between $4.50–$4.60 per bushel in the short term, with potential rebounds if Brazilian weather disrupts harvests or USDA adjusts stocks downward.

Soybeans: Trade and Policy Uncertainty Drags Demand Expectations

July soybean contracts fell by 4-1/4 cents to $10.41-1/4 per bushel. Planting progress reached 30%, above the five-year average of 23%. Despite commodity funds increasing net long positions by 8,500 contracts over 30 days, they turned net short in the past five days, reflecting short-term bearish sentiment.

The EPA has not yet clarified the biofuel blending policy, increasing market uncertainty. The basis at the Lafayette crushing plant in Indiana plummeted by 10 cents, indicating weak local demand.

Trend Prediction: Soybeans are under pressure in the short term within a $10.30–$10.50 range; policy or export improvements could push prices to test $10.60.

Soybean Oil: Adjusting with Bullish Support

July soybean oil fell by 0.38 cents to 48.35 cents per pound. Despite intraday corrections, commodity funds added 30,000 net long positions in the past 30 days, reflecting long-term bullish sentiment. Strong export demand and stable Gulf CIF basis support this sentiment, although biofuel policy uncertainty continues to apply pressure.

Trend Prediction: Expect a short-term adjustment within a 47.50–49.00 cents per pound range; clarity in policy could push prices to 50 cents.

Soybean Meal: Abundant Supply Limits Price Gains

The July soybean meal contract fell by $2.50 to $293 per short ton. Funds increased net short positions, stifling rebound confidence. High crushing volume leads to ample supply, combined with expectations of abundant South American soybean harvests, leaving the market lacking bullish drivers.

Trend Prediction: Soybean meal is expected to consolidate between $290–$300; if export demand improves, a rebound to $310 is possible.

Wheat: Weather Factors Drive Price Rebound

Wheat was the only strengthening commodity, with July hard red winter wheat rising 5-1/4 cents to $5.38 per bushel. The U.S. winter wheat good-to-excellent rate improved to 51%, but Oklahoma's yield slightly below last year sparked weather-related speculation and technical buying. Funds increased long positions by 9,000 contracts over five days.

Trend Prediction: Wheat may oscillate between $5.30–$5.50 in the short term; release of import demand might push it to $5.60.

Future Outlook: Divergence Continues, Policy and Weather as Key Variables

Overall, the CBOT grain market will continue to show divergence among varieties in the short term. Corn and soybeans remain weak due to planting progress and export pressure, while wheat has rebound potential driven by weather. Soybean oil holds bullish confidence, whereas soybean meal faces dual supply-demand pressure. Traders should closely follow USDA reports, international purchasing progress, and policy changes, flexibly adjusting trading strategies.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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