Afternoon report: Corn prices also firm on Wednesday, with wheat prices mixed.
Widespread rainy weather over the next several days is expected to slow spring fieldwork, which helped push corn and soybean prices higher in midweek trading. Corn prices captured gains of around 1.25%, while soybeans firmed 1.75%. Wheat prices were mixed after some uneven technical maneuvering – profit-takers trimmed winter wheat prices by around 0.5%, while spring wheat contracts managed to scrape up meager gains by the close.
More wet, cold weather is blowing across the central U.S. later this week. Parts of the Northern Plains could gather another 1.5″ or more between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally cool weather for the Corn Belt between April 27 and May 3, with drier-than-normal conditions finally making a return.
On Wall St. the Dow firmed 239 points in afternoon trading to 35,150, although the tech-heavy Nasdaq Composite tilted more than 1% lower on the heels of Netflix losing 200,000 subscribers in Q1, an announcement that slashed other streaming services like Disney, Roku and Paramount. Energy futures trended higher again today. Crude oil was near-even at just below $103 per barrel, while diesel jumped more than 2.5% higher and gasoline firmed by 1%. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of soybeans (+1,000) and soyoil (+1,000) contracts but were net sellers of corn (-7,000), soymeal (-3,000) and CBOT wheat (-8,500).
Corn
Corn prices firmed 1.25% on a round of technical buying largely spurred by expected planting delays in the U.S., with general export optimism lending additional support. May futures rose 11 cents to $8.15, with July futures up 9.5 cents to $8.0925.
Corn basis bids were mostly steady to weak after trending 3 to 7 cents lower at three Midwestern locations on Wednesday. An Ohio elevator bucked the overall trend, firming 7 cents higher today.
Ethanol production for the week ending April 15 faded another 5% lower to land at the lowest level since September 2021, with a daily average of just 947,000 barrels., per the latest data from the U.S. Energy Information Administration. Stocks slid 2% lower to the lowest levels in more than three months.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show another big round of corn sales, with trade guesses ranging between 53.1 million and 90.5 million bushels for the week ending April 14.
In Brazil, more corn and soybean plantings has put downward pressure on the country’s sugarcane acres, which were down another 3.5% in 2021/22 to 20.55 million acres. The crop has been in gradual decline after peaking in 2016/17. “It is hard to match the profitability of planting soybeans and corn in the same area,” according to Conab’s director for agricultural policy, Sergio De Zen. That makes it difficult for the sugar industry to even maintain current sugarcane area, he notes.
Refinitiv Commodities Research estimates that China’s corn production could reach a record 10.866 billion bushels during the 2022/23 season, based on acreage and yield trends. That would best this season’s record-breaking crop by 1.2%, if realized. “This season, Chinese farmers will continue to favor corn plantings amid profitable prices and past farming practice,” according to Refinitiv.
Every year has its own “unique spin,” and 2022 is a compelling example of that idea, according to Josh Green with Advance Trading. “This year has been a testament to how quickly markets can change,” noting drought in Brazil and war in Ukraine as two huge market movers in recent months. At the same time, U.S. producers will plant one of the most expensive crops they have ever grown – but opportunities still abound. Click here to read Green’s analysis in the latest Ag Marketing IQ blog.
Preliminary volume estimates were for 322,137 contracts, shifting slightly below Tuesday’s final count of 359,915.
Soybeans
Soybean prices made significant inroads on a round of technical buying triggered by dwindling domestic supplies, healthy export optimism and a slower-than-normal start to the 2022 season. May futures climbed 30 cents to $17.4650, while July futures rose 24.5 cents to $17.1625.
Soybean basis bids were mostly steady to firm on Wednesday after jumping 11 to 15 cents higher at three Midwestern locations today. An Ohio river terminal bucked the overall trend after dropping 5 cents lower.
Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 18.4 million and 71.7 million bushels for the week ending April 14. Analysts also expect to see soymeal sales ranging between 75,000 and 350,000 metric tons, plus up to 25,000 MT of soyoil sales.
In Brazil, Abiove made no changes to its prior estimate for the country’s 2021/22 production potential, which remains at 4.604 billion bushels. Ending stocks are estimated at 88.9 million bushels, rising 27% above March totals. And Abiove estimates that soymeal exports will climb to a record 18.3 million metric tons this season, with revenue from the entire soybean complex also expected to reset the record books, with $55.9 billion.
Chinese officials indicated the country’s soybean production should improve by 26% as the world’s top soybean buyer increases acres and looks to be slightly less reliant on the oilseed. The bump would bring Chinese soybean production to 758 million bushels. Import needs are still around 3.493 billion bushels, however. The U.S. and Brazil supply the vast majority of China’s soybean imports.
However, Chinese imports of U.S. soybeans in March tumbled to less than half of year-ago results, with 123.8 million bushels. Cumulative totals for the first three months of 2022 are about 30% lower year-over-year. In contrast, Brazilian imports in Q1 soared 370% to 234.1 million bushels. Poor crush margins continue to hamper overall sales trends in China.
Preliminary volume estimates were for 203,758 contracts, trending moderately higher than Tuesday’s final count of 165,974.
Wheat
Wheat prices were mixed after an uneven round of technical maneuvering today. Winter wheat contracts spilled moderately lower on a second consecutive session of profit-taking, while spring wheat contracts fought for modest gains on some light technical buying. May Chicago SRW futures fell 6 cents to $10.93, May Kansas City HRW contracts dropped 5 cents to $11.6650, and May MGEX spring wheat futures added 3.75 cents to $11.73.
Prior to Thursday morning’s weekly export report from USDA, analysts think the agency will show wheat sales ranging between 5.5 million and 27.6 million bushels for the week ending April 14.
Argentine farmers may plant around 16.062 million acres of wheat during the 2022/23 season, per the Buenos Aires Cereal Exchange. That’s a slight decline from a year ago, with an uptick in barley acres expected to fill the gap. That makes it somewhat unlikely for Argentina to repeat its 2021/22 production of 801 million bushels.
Jordan passed on its international tender to purchase 4.4 million bushels of wheat, which closed earlier today. The country has struggled to close deals on similar tenders in recent months, especially as prices have heated up since late February. Jordan is expected to issue a similar tender that will close next Wednesday.
Preliminary volume estimates were for 76,557 CBOT contracts, sliding slightly below Tuesday’s final count of 77,869.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
816.5
796.75
815.75
11
22-Jul
810.5
792
810
9.5
Soybeans
22-May
1750
1714.5
1746.75
30
22-Jul
1721.75
1688.25
1717
24.5
Soymeal $/ton
22-Jul
467.4
459.2
466.3
6.9
Soyoil cents/lb
22-Jul
79.26
77.5
78.75
0.57
Wheat $/bushel
22-May
1109.75
1066.75
1088
-6
22-Jul
1118.5
1075
1097.5
-6.75
KC Wheat
22-May
1186.25
1143.25
1163.25
-5
22-Jul
1191.5
1147.5
1169.5
-2
MPLS Wheat
22-May
1179.75
1149.5
1169.25
3.75
22-Jul
1182.75
1152.5
1172.25
2.75
Live Cattle cents/lb
22-Apr
143.15
141.775
143.1
1.75
Feeder Cattle cents/lb
22-May
163.4
160.725
162.775
2
Lean Hogs cents/lb
22-May
121.075
118.325
118.5
-2.825
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-May
104.16
100.7
102.56
0
Diesel
22-May
3.9864
3.8535
3.9767
0.1148
Unleaded Gasoline $/gallon
22-May
3.2948
3.1943
3.2858
0.0384
Natural Gas
22-Jun
7.496
6.894
7.046
-0.231
U.S. Dollar Index
22-Jun
101.045
100.215
100.4
-0.564
Gold $/ounce
22-May
1954.6
1938.7
1952.6
-3.1
Copper
22-Apr
4.6475
4.623
4.6475
-0.0665
Fertilizer Swaps
(as of 04/15)
DAP Tampa-index
1,240.0
0
DAP-New Orleans
1,052.7
0
Urea-New Orleans
854.3
-33.07
Urea-Middle East
995.0
-125
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
-5.51
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