Afternoon report: Wheat and corn also trend higher to end the week.
Grain prices were already in the green ahead of this morning’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA, and prices jumped even higher after the agency confirmed tightening soybean stocks. Lingering questions about U.S. acreage and Ukraine’s export potential kept corn prices firm as well. Corn prices rose 1.25%, with soybeans up more than 2.5% and some wheat contracts trending more than 3% higher. For more exclusive coverage and analysis of today’s report, click here.
Additional moisture is on the way to parts of the Midwest and Plains between Saturday and Tuesday – click here for the latest 72-hour cumulative precipitation map from NOAA to see which areas are affected. NOAA’s 8-to-14-day outlook predicts a return to seasonally dry conditions for much of the central U.S. between April 15 and April 21, with widespread seasonally cold weather for most of the U.S. during this time.
On Wall St., the Dow rose 154 points in afternoon trading to 34,738 as investors continue to be primarily concerned on interest rate and inflation trends, along with the ongoing Russian invasion of Ukraine. Energy futures made a solid push higher this afternoon, with crude oil up 2.25% to $98 per barrel. Diesel added 1.5%, while gasoline climbed nearly 3% higher. The U.S. Dollar firmed slightly.
On Thursday, commodity funds were net buyers of corn (+2,500), soybeans (+10,000) and soyoil (+5,000) contracts but were net sellers of soymeal (-1,000) and CBOT wheat (-6,500).
NOTE: Keeping up with crop conditions and development across the country can be challenging as planting season nears, but Farm Futures is here to help. Our Feedback from the Field series is back for another year to help farmers across the country share their views on the 2022 growing season. Click here to find out how to participate – we’d love to hear from you!
Corn
Corn prices wobbled when WASDE failed to show tighter stocks in today’s report but ultimately followed soybeans and wheat higher on a round of technical buying, closing with gains of around 1.25%. The prospect of fewer U.S. corn acres this season due to high fertilizer prices lent additional support. May futures rose 10.25 cents to $7.68, with July futures up 9.5 cents to $7.5975.
Corn basis bids were steady to firm after rising 1 to 7 cents higher across five Midwestern locations on Friday.
In today’s WASE report, USDA noted offsetting changes on feed and residual use versus corn used for ethanol production, which kept ending stocks unchanged at 1.440 billion bushels. Analysts were expecting to see a modest reduction, with an average trade guess of 1.415 billion bushels.
World ending stocks trended modestly higher, moving from 11.849 billion bushels in March up to 12.026 billion bushels. Analysts were expecting that number to be virtually unchanged, with an average trade guess of 11.847 billion bushels. USDA left most overseas corn production estimates unchanged, including for China, South Africa, Ukraine and Argentina. However, the agency did increase its estimate for production in Brazil to 4.567 billion bushels.
Corn plantings are just getting underway in France, with progress of 4% through April 4, according to FranceAgriMer. That’s up from 2% a week ago but four points behind last year’s pace so far.
Preliminary volume estimates were for 357,347 contracts, moving moderately above Thursday’s final count of 306,246.
Soybeans
Soybean prices made substantial inroads after USDA reported lower U.S. stocks and reduced its production estimates in Brazil, which spurred a round of technical buying. Spillover strength from other commodities lent additional support today. May futures climbed 43.5 cents to $16.89, with July futures up 41 cents to $16.68.
Soybean basis bids were steady to firm after rising 1 to 9 cents higher at two interior river terminals and 6 cents higher at an Ohio elevator on Friday.
USDA made some alterations to the soybean balance sheet this month, including an increase in exports and seed use that led to lower stocks. Exports improved 25 million bushels to 2.12 billion bushels. And seed usage moved higher to reflect the expectations for an increase in planted acres this year. Ending stocks are now estimated at 260 million bushels, which was very close to the average trade guess of 262 million bushels.
Global ending stocks tightened slightly, moving from 3.305 billion bushels in March down to 3.291 billion bushels. Analysts were expecting that number to drop even further, with an average trade guess of 3.262 billion bushels.
China plans to sell 18.4 million bushels of its state reserves of imported soybeans next week, according to a notice today from the country’s National Grain Trade Center. China has offered other soybean and wheat auctions earlier this year to combat tight domestic supplies.
Preliminary volume estimates were for 215,917 contracts, shifting slightly above Thursday’s final count of 211,859.
Wheat
Wheat prices moved substantially higher Friday on lower-than-expected global stocks, coupled with sustained worries about production and export potential in Ukraine this season. May Chicago SRW futures rose 29.75 cents to $10.4975, May Kansas City HRW futures climbed 35.5 cents to $11.0625, and May MGEX spring wheat futures gained 22 cents to $11.2150.
USDA reported “stable supplies, lower domestic use, reduced exports and higher ending stocks” in today’s WASDE report Exports fell another 14 million bushels to 785 million bushels, with the agency noting that U.S. wheat is priced out of many overseas markets at the moment. Exports will fall to the lowest level since 2015/16 if this trend plays out. Ending stocks moved 25 million bushels higher to 678 million bushels. Analysts were expecting to see a much more modest increase, with an average trade guess of 656 million bushels. Still, ending stocks are 20% below year-ago levels.
World ending stocks retreated lower, in contrast, bucking analyst expectations. Ending stocks dropped from 10.343 billion bushels in March down to 10.229 billion bushels. Trade guesses came in 100 million bushels higher than that number.
Factoring the impacts of the war in Ukraine will take time, notes Bill Biedermann, hedging strategist with AgMarket.net. “[It] will also be difficult to assess as transportation in the export sector, as well as interior shipping interruptions, will restrict the country’s potential to reach normal production goals in the coming season,” he says. Biedermann explores additional issues in play and what he says could be a wild ride ahead in yesterday’s Ag Marketing IQ blog – click here to learn more.
French farm office FranceAgriMer reports that 92% of the country’s soft wheat crop is in good-to-excellent condition through April 4, holding steady from a week ago and five points ahead of year-ago ratings. France is Europe’s top wheat producer.
Preliminary volume estimates were for 104,508 CBOT contracts, easing fractionally below Thursday’s final count of 104,965.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
773
752.75
768.75
10.25
22-Jul
764
745.5
760.75
9.5
Soybeans
22-May
1689.75
1645.5
1689
43.5
22-Jul
1668.75
1625.75
1668
41
Soymeal $/ton
22-Jul
463.9
454.5
462.6
8.4
Soyoil cents/lb
22-Jul
73.73
71.16
73.47
2.03
Wheat $/bushel
22-May
1054.25
1017
1051.5
29.75
22-Jul
1060
1022.25
1058.25
31.25
KC Wheat
22-May
1109.5
1065.5
1106.75
35.5
22-Jul
1112.75
1068
1110
35.5
MPLS Wheat
22-May
1129.75
1097.25
1127.25
22
22-Jul
1128.75
1095.75
1126.75
21.5
Live Cattle cents/lb
22-Apr
138.6
137.5
138
0
Feeder Cattle cents/lb
22-May
160.725
158.55
159.575
0.1
Lean Hogs cents/lb
22-May
108.5
107.55
108.425
0.1
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-May
98.76
95.29
97.99
1.96
Diesel
22-May
3.3382
3.2459
3.3286
0.0608
Unleaded Gasoline $/gallon
22-May
3.1415
3.0166
3.1197
0.0799
Natural Gas
22-Jun
6.615
6.338
6.376
-0.06
U.S. Dollar Index
22-Jun
100.2
99.745
99.8
0.04
Gold $/ounce
22-May
1948.9
1928.7
1941.8
8
Copper
22-Apr
4.745
4.707
4.707
0.012
Fertilizer Swaps
(as of 04/01)
DAP Tampa-index
1,240.0
222
DAP-New Orleans
1,085.8
-16.53
Urea-New Orleans
1,002.0
9.92
Urea-Middle East
1,130.0
0
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
689.0
2.76
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