Afternoon report: Soybeans retreat moderately lower, while corn eases slightly.
Wheat prices remained red-hot on Wednesday, with CBOT contracts hitting limit-up gains for the third straight session on sustained worries over Ukraine and Russia getting locked out of the export market for the foreseeable future. Spring wheat gains were much more modest. Soybeans spilled into the red, in contrast, as profit-takers entered the fray. Corn closed with narrowly mixed results.
Rain and snow will return to parts of the Plains and Midwest between Thursday and Sunday, with South Dakota, Iowa, Minnesota and Wisconsin likely to see the highest amounts, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet conditions for the upper Midwest and Northern Plains between March 9 and March 15, with cooler-than-normal weather sweeping into the central U.S.
On Wall St,. the Dow climbed 616 points in afternoon trading to 33,911 as investors attempt to shake off recent fear and uncertainty over Russia’s invasion into Ukraine. Keep an eye out for a likely interest rate hike later this month, as has been expressed by Federal Reserve chair Jerome Powell. Energy prices continued to collect major gains today, with crude oil jumping another 7% higher this afternoon to reach $110 per barrel. Diesel climbed 11% higher, with gasoline up around 7%. The U.S. Dollar softened slightly.
On Tuesday, commodity funds were again net buyers of all major grain contracts, including corn (+25,000), soybeans (+20,000), soymeal (+3,500), soyoil (+12,000) and CBOT wheat (+18,500).
NOTE: Farm Futures is conducting its March 2022 survey to project acreage estimates ahead of USDA’s March 31 Prospective Plantings report. We will release the survey results ahead of USDA’s numbers to help you adjust your grain marketing plans accordingly. Click here to take our survey – as thanks, you’ll be entered for a chance to win one of five $50 Amazon gift cards.
Corn
Corn prices tested big gains this morning that mostly evaporated by the close as traders continue to keep a close eye on some drought-relieving rains in South America and geopolitical unrest in the Black Sea region. March futures slid 0.75 cents lower to $7.39, while May futures picked up 1.25 cents to $7.27.
Corn basis bids were steady to weak on Wednesday after dropping 3 to 4 cents at three Midwestern ethanol plants and sliding 1 to 3 cents lower at two processors today.
Russia’s invasion of Ukraine has been a significant driver of the latest grain rally, has caused a surge in energy prices and more. Farm Futures has been generating a lot of fresh content that is taking a closer look at the situation. Click here and here for our latest analysis.
USDA reported yesterday afternoon that 1.929 million tons of DDGS were produced in January, which was up from year-ago results of 1.753 million tons. An additional 474 million bushels of corn were used to produce ethanol in January, trending well above year-ago results of 417 million bushels.
The latest ethanol data from the U.S. Energy Information Administration, out earlier today, showed weekly production through February 25 fell below 1 million barrels per day for just the second time since last October, with a daily average of 997,000 barrels.
Ahead of the next USDA export report, out Thursday morning and covering the week through February 24, analysts expect the agency to show corn sales ranging between 23.6 million and 63.0 million bushels. Actual volume will need to land toward the higher end of these estimates to move above the prior week’s tally.
Ukraine grows a sizeable corn crop each year, and much of that production is exported rather than used domestically. Due to recent port closures, some experts predict that could help push corn prices above the $8 per bushel benchmark, including Josh Green, agriculture risk management advisor with Advance Trading. Green took a closer look at the situation in yesterday’s Ag Marketing IQ blog – click here to learn more.
South Korea purchased 5.3 million bushels of animal feed corn from optional origins in an international tender that closed earlier today. The grain is for between early May and late June. Despite already high prices, grain buyers are mulling the prospect of prices moving even higher as the Russia/Ukraine conflict unfurls.
Preliminary volume estimates were for 487,896 contracts, trending moderately higher than Tuesday’s final count of 436,413.
Soybeans
Soybean prices succumbed to a round of technical selling and profit-taking partly spurred by improved South American weather forecasts. March futures dropped 24.75 cents to $16.8075, with May futures down 23.75 cents to $16.6625.
Soybean basis bids were mostly steady across the central U.S. on Wednesday but did tilt 5 cents lower at an Iowa processor today.
Private exporters announced two more large soybean sales on Wednesday. The first was for 9.7 million bushels to unknown destinations. Of that total, 75% is for delivery during the current marketing year, with the remainder for delivery in 2022/23. The second sale was for 9.8 million bushels to China. Seventy-four percent of that total will be delivered in the current marketing year, with the remaining 26% for delivery in 2022/23.
Ahead of the next export report from USDA, out tomorrow morning, analysts think the agency will show soybean sales ranging between 44.1 million and 86.3 million bushels for the week ending February 24. Analysts also expect to see soymeal sales ranging between 100,000 and 400,000 metric tons, plus an additional 5,000 MT to 60,000 MT of soyoil sales.
Argentina has suffered under months of drought, but a new problem is emerging late into the 2021/22 season – heavy rains, with more in the forecasts, which could create harvest problems for both corn and soybeans. But for the time being, analysts are welcoming the much-needed moisture. “What these rains allow is to sustain our current outlook. It stops the deterioration,” according to Esteban Copati, head analyst with the Buenos Aires grains exchange.
Preliminary volume estimates were for 170,575 contracts, shifting slightly lower than Tuesday’s final count of 199,335.
Wheat
Wheat prices spent another session in rally mode as two of the largest wheat exporters (Russia and Ukraine) remain locked in serious conflict, which is causing major shipping disruptions. May Chicago SRW futures jumped 75 cents to $10.59, May Kansas City HRW futures climbed 75 cents to $10.78, and May MGEX spring wheat futures added 9.5 cents to $10.6325.
Ahead of Thursday morning’s export report from USDA, analysts expect to see wheat sales ranging between 9.2 million and 34.0 million bushels for the week ending February 24.
Turkey has provisionally purchased 13.6 million bushels of wheat from optional origins in an international tender that closed earlier today. The purchases are still subject to final confirmation and can still be canceled, however.
Algeria purchased an estimated 9.2 million bushels of durum wheat from optional origins in a tender that closed earlier today. The grain is for shipment in April.
Tunisia purchased 3.7 million bushels of durum wheat from optional origins in an international tender that closed earlier today. The grain is for shipment starting in late March or early April, depending on origin.
Japan purchased around 885,000 bushels of food-quality wheat from the United States in a regular tender that closed earlier today. The grain is for shipment between April 21 and May 20.
Preliminary volume estimates were for 359,830 CBOT contracts, which more than doubled Tuesday’s final count of 148,768.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
760
723
739
-0.75
22-May
747.75
711.5
725
1.25
Soybeans
22-Mar
1708
1668
1677.5
-24.75
22-May
1697
1650.25
1663
-23.75
Soymeal $/ton
22-May
457.9
443.1
448
-5.1
Soyoil cents/lb
22-May
77.02
74.55
75.87
-0.39
Wheat $/bushel
22-Mar
1132
997.5
1058.5
56.75
22-May
1059
985.25
1059
75
KC Wheat
22-Mar
1059.75
1043.5
1073.5
47.5
22-May
1078
1006
1075.25
75
MPLS Wheat
22-Mar
1100
1054.75
1059.25
0.75
22-May
1113.75
1010.75
1058.25
9.5
Live Cattle cents/lb
22-Apr
141.725
139.75
140.2
-0.325
Feeder Cattle cents/lb
22-Apr
164.2
160.35
163.5
3.7
Lean Hogs cents/lb
22-Apr
111.325
109.575
111.025
0.15
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Apr
112.51
105.18
111.68
8.27
Diesel
22-Apr
3.5507
3.2076
3.5478
0.3967
Unleaded Gasoline $/gallon
22-Apr
3.3352
3.127
3.3339
0.2452
Natural Gas
22-May
4.85
4.63
4.812
0.214
U.S. Dollar Index
22-Mar
97.85
97.295
97.395
-0.011
Gold $/ounce
22-Apr
1951.4
1916
1919.8
-22.6
Copper
22-Mar
4.69
4.553
4.6715
0.085
Fertilizer Swaps
(as of 02/25)
DAP Tampa-index
842.5
7.5
DAP-New Orleans
857.1
19.29
Urea-New Orleans
683.4
99.21
Urea-Middle East
665.0
65
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
606.3
0
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