Today is the day that all long agriculture August futures need to be liquidated by the close of trading to avoid any chance of being assigned delivery. That includes August basis contracts with your merchandiser. Tomorrow, August futures will have no daily trading limit and the exchange minimum margin requirement will triple.
The Federal Reserve raised the discount interest rate by the expected 75 basis points (0.75%). The dollar plunged lower on the news and the Dow jumped higher. This was the classic “buy the rumor and sell the fact” trade. The dollar was sharply higher and the stock market was lower the past several weeks as higher interest rates attract buyers for US dollars to invest in US government bonds and higher interest rates increase the cost of doing business, so business profits decline and so does their value.
The Wheat Council's spring wheat tour showed better-than-expected yield of 48.9 bushels. The 5-year average yield is 39. Also, Canada’s wheat production was increased by 3% and Russian wheat exports were increased a couple hundred thousand mts yesterday. The Ukraine export deal is still “on”, providing overhead resistance.