Soybean rally hasn’t lost steam.
Corn and wheat stumble in Wednesday’s session
Grain prices were mixed but mostly lower today after corn prices fell nearly 2%, while wheat prices lost between 1% and 2% after a round of technical selling and profit-taking. But soybeans continued to find positive forward momentum as traders remain focused on drought-stressed South American crops. Prices couldn’t hold on to 30-cent overnight gains but still trended another 1% higher today.
Winter Storm Landon is in the process of delivering a 2,000-mile stretch of snow and ice from Arizona and Texas through the U.S. Northeast. But some key parts of the Midwest, including Iowa, South Dakota and Nebraska, are unlikely to see any measurable moisture between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. Further out, the agency’s 8-to-14-day outlook predicts some seasonally wet weather possible for the Northern Plains between February 9 and February 15, with warmer-than-normal conditions emerging in the Central and Northern Plains.
On Wall St., the Dow trended 170 points higher in afternoon trading to 35,575, driven partly by some better-than-expected corporate earnings reports. Investors remain wary of inflation trends and the probability for multiple interest rate hikes in 2022, however. Energy prices were mixed but mostly higher. Crude oil dipped slightly lower this afternoon, remaining just above $88 per barrel. Gasoline rose 1%, with diesel up around 0.75%. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+12,000), soybeans (+18,000), soymeal (+9,500), soyoil (+4,000) and CBT wheat (+4,000).
Corn
Corn prices faded nearly 2% lower after a round of technical selling Wednesday, facing double-digit losses by the close. Ethanol stocks, which are near a two-year high, were partly to blame. March futures dropped 12.5 cents to $6.2225, with May futures down 11.75 cents to $6.22.
Corn basis bids were mostly steady on Wednesday but did tilt 7 cents lower at an Indiana ethanol plant while firming 4 cents higher at an Ohio elevator today.
The latest ethanol production updates from the U.S. Energy Information Administration, out earlier today, showed modest improvements, with a daily average of 1.041 million barrels for the week ending January 28. Production has stayed above the 1-million-barrel benchmark consistently since last October. Ethanol stocks have reached the highest levels since April 2020, meantime.
There’s a bipartisan effort underway to convince the U.S. Environmental Protection Agency to prioritize the Renewable Fuel Standard and ramp up support for domestic biofuel production. Farm Futures policy editor Jacqui Fatka took a closer look at the situation – click here to learn more.
Ahead of Thursday morning’s export report from USDA, analysts think the agency will show corn sales ranging between 23.6 million and 61.0 million bushels for the week ending January 27.
USDA reported yesterday afternoon that the U.S. produced 2.073 million tons of distiller’s dried grains with solubles (DDGS) in December, which was up from 1.787 million tons a year ago. And another 485.9 million bushels of corn were used to produce ethanol in December, which was above year-over-year totals of 431.7 million bushels.
Grain traveling the nation’s railways saw another 24,959 carloads last week. That brings cumulative totals for 2022 up to 94,514 carloads, which is trending 14% below last year’s pace so far.
Preliminary volume estimates were for 500,407 contracts, jumping nearly 46% above Tuesday’s final count of 343,747.
Soybeans
Soybean prices continued to improve Wednesday after another round of technical buying. Prices were unable to hold onto overnight gains of around 30 cents but still closed around 1% higher. South American production potential remains very much in focus, and another flash sale announced this morning lent additional support. March futures rose 17.5 cents to $15.46, with may futures up 16 cents to $15.5025.
Soybean basis bids held steady at most Midwestern locations on Wednesday but did shift 3 cents higher at an Ohio river terminal while sliding 5 cents lower at an Iowa processor today.
Private exporters announced to USDA the sale of 14.0 million bushels of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which began September 1.
Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show soybean sales ranging between 29.4 million and 64.3 million bushels for the week ending January 27. Analysts also anticipate soymeal sales ranging between 100,000 and 500,000 metric tons, plus up to 45,000 MT in soyoil sales.
USDA reported yesterday afternoon that around 198 million bushels of soybeans were crushed in December. That’s slightly ahead of November’s crush, which totaled around 190 million bushels.
Preliminary volume estimates were for 343,426 contracts, which was modestly higher than Tuesday’s final count of 320,261.
Wheat
Wheat prices faded 1% to 2% lower Wednesday on a round of technical selling partly spurred by some recent precipitation in the U.S. Plains. Although traders remain wary of the current political tensions between Ukraine and Russia, the Biden Administration has walked back comments that an invasion could be “imminent.” March Chicago SRW futures fell 13.5 cents to $7.5550, March Kansas City HRW futures lost 16.75 cents to $7.6950, and March MGEX spring wheat futures dropped 9 cents to $9.06.
Ahead of Thursday morning’s export report from USDA, analysts anticipate seeing wheat sales ranging between 7.3 million and 32.2 million bushels for the week ending January 27.
Ukraine’s 2021/22 grain exports are up more than 31% year-over-year so far, according to the latest data from the country’s agriculture ministry. That includes wheat sales totaling 624.6 million bushels, plus another 614.1 million bushels in corn sales. Ukraine’s total grain harvest improved 29% last year.
Tunisia purchased 3.7 million bushels of soft wheat, 2.8 million bushels of durum wheat and 3.4 million bushels of barley from optional origins in an international tender that closed earlier today. The grain is for shipment starting in late February.
Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on February 14. The grain is for shipment 40 days after the contract is signed.
Egypt’s supply minister reported that the country’s strategic wheat reserves are sufficient to cover five months, and its strategic reserves of vegetable oils is adequate for 5.5 months. Egypt is the world’s No. 1 wheat buyer.
Preliminary volume estimates were for 108,872 CBOT contracts, tracking moderately above Tuesday’s final count of 87,999.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
640.75
616.75
622.5
-12.5
22-May
639.75
616.75
622.25
-11.75
Soybeans
22-Mar
1564
1526
1545.25
17.5
22-May
1568.25
1531.75
1549.5
16
Soymeal $/ton
22-May
444.6
429.3
433.5
-0.5
Soyoil cents/lb
22-May
66.78
65.57
65.95
0.23
Wheat $/bushel
22-Mar
778.5
749.25
755
-13.5
22-May
782.75
755
761
-13
KC Wheat
22-Mar
797
765.75
769.5
-16.75
22-May
799.5
769.5
773.25
-16
MPLS Wheat
22-Mar
927
902.75
908
-9
22-May
923
900.25
905.25
-8.25
Live Cattle cents/lb
22-Feb
141.475
140.6
141.175
0.875
Feeder Cattle cents/lb
22-Apr
172.05
169.225
171.95
2.8
Lean Hogs cents/lb
22-Apr
100.275
97.175
99.15
1.475
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
89.72
87.1
88.25
0.05
Diesel
22-Mar
2.7848
2.7294
2.7718
0.0306
Unleaded Gasoline $/gallon
22-Mar
2.6173
2.5646
2.6079
0.0327
Natural Gas
22-Apr
5.053
4.664
4.979
0.406
U.S. Dollar Index
22-Mar
96.3
95.795
95.925
-0.45
Gold $/ounce
22-Mar
1810.5
1794.5
1808.6
8.3
Copper
22-Feb
4.485
4.4315
4.4765
0.0475
Fertilizer Swaps
(as of 01/28)
DAP Tampa-index
810.0
0
DAP-New Orleans
738.6
-28
Urea-New Orleans
598.0
-41
Urea-Middle East
655.0
-68
Urea-Black Sea
667.5
-38
UAN (32%) New Orleans
606.3
0
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