Dec Corn and Wheat see New Highs Before Fading: Live Cattle Chase Record Cash

Grains ended mostly higher on Wednesday chasing war headlines with the Strait of Hormuz remaining closed and crude oil soaring $6 to $7 and looking poised to take out the March highs.

Dave Chatterton with Strategic Farm Marketing says the grain markets were supported by money flow and funds were buying adding risk premium tied to war, inflation fears tied to higher energy prices and weather.

“Big up move in crude oil on Wednesday afternoon. And I think that’s tied back to the comments that are coming out of Trump. The ceasefire, the two-week ceasefire extension expires on Wednesday, expired on Wednesday night. Trump has made it pretty clear that we’re preparing for a lengthy blockade of the Strait of Hormuz. As long as that stays closed, we’re getting no energy, no fertilizer coming out of that. The longer we prolong that shortage, if you will, I think the more acute the problem becomes,” he says.

He says the longer it lasts the more the inflation concerns rise.

“The big move in oil, it spills over into the food commodities and particularly into the grains, whether it’s the biofuel connection or the outright just, you know, food connection that goes along with that. We’ve seen buying interest perk up there and money flowing into the complex.”

Wheat Makes New Highs Then Fades

All three classes of wheat hit new highs early Wednesday with new contract highs in hard red spring wheat and 2-year highs in hard red winter before fading. Soft red winter wheat also made 14 month highs then ended lower.