Tidbits, Markets & Inversion, Argentina & China, Australian Farming, CME Records, Export Sales 4/3/26
- Wright team
- 1 day ago
- 4 min read
Tidbits
Markets & Premiums: Yesterday was a very disappointing day for grain futures as the sharply higher crude oil could only rally corn, wheat, and beans very modestly. Even though soybean oil settled sharply higher and May bean oil was up 1.86¢ a pound, May soybeans were down 5¢. May soybean meal was lower, but only $3 a ton.
For a bushel of beans yesterday, the value of the 11½ pounds of oil per bushel increased 21.35¢ and the 48 pounds of meal per bushel decreased by 7.2¢. It makes no sense the May beans were down 5¢.
The market expects crude oil prices to decline within the next month as the futures market is strongly inverted. WTI crude futures for May delivery traded as much as $16.70 per barrel higher than the June contract yesterday.
In the grain market, when the nearby contract months are trading at a higher price than the deferred contracts so there is no carry, it is usually called an “inverted market,” but in the crude oil and other markets, it is called “backwardation.” While “contango” is a normal carry situation opposite to “backwardation”. Crude oil prices for May 2027 are only $69.28 a barrel, about a $42 discount to front-month May 2026 crude futures. Given the breakeven of shale oil wells is about $70, no one is rushing to drill new wells. Obviously, all the current oil wells are being milked for maximum production.
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