Morning report: Corn, soybeans tumble on planting optimism for the next week. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 8-12 cents
Soybeans down 11-16 cents; Soymeal down $1.30/ton; Soyoil down $1.30/lb
Chicago wheat down 7-8 cents; Kansas City wheat down 10-12 cents; Minneapolis wheat down 1-2 cents
*Prices as of 6:55am CDT.
Feedback from the Field is live! There have been a lot of you left bored and frustrated with rain delays over the past couple days and you told me all about it! Hang in there, everyone. Clear skies are on the way.
Meanwhile, we are starting to see more responses about planting progress being made, especially from readers in the Plains. Want to see how your farm’s progress tacks up against other growers across the country?
Just click this link to take the survey and share updates about your farm’s spring progress. I review and upload results daily to the FFTF Google MyMap, so farmers can see others’ responses from across the country – or even across the county!
Corn
Corn prices fell $0.08-$0.12/bushel overnight as the complex continues to follow losses in the wheat market. Warming forecasts across the Midwest next week are likely to help spring planting activities progress rapidly in the coming week, easing some supply concerns that have persisted in the market over the past couple weeks.
Soybeans
Soyoil prices led the drop lower in the soybean complex this morning. Soybean prices fell $0.13-$0.16/bushel following a selloff in the palm oil market overnight as ending stock projections were slated to increase to the highest volume since January 2022 on improving production volumes in Malaysia.
Malaysia follows Indonesia as the world’s second largest palm oil producer. Palm oil is a direct competitor to soyoil as they compete for market share in the global edible oils market. Thus, changes in palm oil prices can have similar effects on soyoil prices.
Soybean prices also lost momentum as chances for clear skies in the Midwest are increasing next week, which will help aid with timely planting progress in the region.
Wheat
The profit-takers feasted on recent wheat rallies this morning, taking $0.02-$0.11/bushel off the tops of yesterday’s wheat prices. Despite this morning’s losses, wheat prices remain on track to post a weekly gain thanks to growing concerns about India’s wheat crop, which could tighten global supplies.
“The Northern Hemisphere weather is a concern for the winter crops,” Phin Ziebell, agribusiness economist at National Australia Bank, told Reuters this morning. “India has been supplying wheat but it is too hot and dry which could curb exports.”
Weather concerns in the U.S. are also supporting global supply fears. Crops in the European Union have enjoyed a favorable growing season but have faced some condition rating downgrades in recent weeks due to hot and dry weather.
It’s hardly a reason to throw the baby out with the bathwater, but amid tight global supplies and unrelenting global food demand, any yield shortfalls this year for the wheat market will be quickly – and lucratively – rewarded by top dollar buyers.
The outlook for Russia’s wheat export volumes in 2022/23 is taking an even more optimistic view as favorable growing conditions across much of the country point to a bumper harvest this year. Russian agricultural consultancy SovEcon has increased its forecast for exports, though it faces resistance at upward adjustments due to Russia’s export quota currently in place.
SovEcon now forecasts 2021/22 Russian wheat exports at 1.25 billion bushels (0.6% increase). 2022/23 exports are projected to be even higher than the current marketing year, coming in at 1.51 billion bushels thanks to good crop conditions so far this year in Russia.
Marketing year to date Russian wheat exports remain about 69% higher than year ago shipping volumes despite economic sanctions levied against the country due to the war in Ukraine, with most of the wheat destined for Egypt, Iran, and Turkey. SovEcon points out that Russian wheat exports in April and May of last year shrunk in response to the export tax on Russian wheat shipments introduced at that time.
“In May and June Russian exports will tumble as traders are running out of export quotas,” said Andrey Sizov, head of SovEcon. “Shipments are likely to rise sharply in July after the end of the quota period. Provided there are no sanctions directly affecting Russian grain exports, traders could start to sell grain aggressively even without waiting for the new crop arrival which harvest starts in July – there will be plenty of old crop stocks in the Russian South close to the terminals.”
Weather
Today’s showers in the Eastern Corn Belt will shift east into New England by tomorrow afternoon, according to NOAA’s short-range forecasts. Clear skies will be short-lived for only another da or two. Another round of showers is expected to traverse over the Northern Plains and Upper Midwest on Sunday, so farmers will likely be dodging rain drops again going into next week.
Drought conditions across the country are lessening on the aggregate but remain a dire concern for growers in the Plains and Western U.S. Yesterday’s drought monitor data update saw 63.89% of the country in abnormally dry to extreme drought condition as of May 3.
While that figure represents the eighth consecutive week of reduced drought ratings for the country thanks in large part to recent cross-country precipitation systems over the past few weeks, it underscores the severity with which dry conditions are accelerating across the Plains. As of Tuesday, 84.14% of acreage in the High Plains was rated between abnormally dry and exceptional drought status.
That means that the drought stress facing the U.S. winter wheat crop will likely continue to remain in place until meaningful showers can be forecasted in the Plains. Don’t hold your breath on that one – it’s a La Nina year, which typically results in below average precipitation chances for the Plains.
So as analysts begin to model yield predictions for the 2022 wheat crop, expect to see values on the lower side of trendline yields for 2022 wheat crops. The moisture shortfall may help boost protein values, but yield shortfalls are likely to be more significant this year as global supplies remain tight amid the Russian war in Ukraine.
Financials
U.S. stock futures dipped overnight on predictions about today’s monthly jobs report. Economists expect today’s unemployment figure will drop to around 3.5% – the lowest value since 1960. Thus, rising hourly wages are likely playing a role in inflationary pressures, making a path away from high inflation a more challenging problem for the Federal Reserve.
“Any upward pressure on the average hourly earnings could lead to another spike of U.S. yields and therefore add negative pressure on equities and especially tech stocks,” Christophe Barraud, chief economist at Market Securities LLP in Paris, told Bloomberg this morning.
Bearish pressures are also afoot due to slowing economic growth in China, due in large part to the country’s zero-COVID strategy which has forced draconian lockdown measures in recent months with little signs of relenting.
Also worth a read on our website, FarmFutures.com:
Naomi Blohm expects markets to go for a “fierce, fast, and ferocious” ride following next week’s WASDE reports.
Ashley Arrington explains how higher farmland values impact your farm’s balance sheet.
Policy editor Jacqui Fatka explains how next year’s Farm Bill could be different from the one currently in place. Will USDA reports continue the bearish price run for grains?
Jim McCormick thinks so and weighs the odds in a recent Ag Marketing IQ column.
Advance Trading’s Luke Williams has recommendations for farmers on locking in profitable grain prices without even making a sale.
Water Street Solutions CEO Darren Frye reminds farmers that practicing leadership skills can help to make them better decision makers. Frye offers growers tips for practicing financial, business leadership, and marketing skills so they can confidently make decisions when the time comes.
Morning Ag Commodity Prices – 5/6/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
8
7.95
7.96
-0.0775
-0.96%
JUL ’22 CORN
$ / BSH
7.9675
7.86
7.8675
-0.1075
-1.35%
SEP ’22 CORN
$ / BSH
7.545
7.445
7.45
-0.1125
-1.49%
DEC ’22 CORN
$ / BSH
7.3675
7.255
7.265
-0.12
-1.62%
MAR ’23 CORN
$ / BSH
7.4025
7.295
7.305
-0.1175
-1.58%
MAY ’23 CORN
$ / BSH
7.41
7.3075
7.31
-0.1225
-1.65%
JUL ’23 CORN
$ / BSH
7.3725
7.27
7.2775
-0.1175
-1.59%
MAY ’22 SOYBEANS
$ / BSH
16.71
16.645
16.645
-0.14
-0.83%
JUL ’22 SOYBEANS
$ / BSH
16.5
16.2725
16.3175
-0.1525
-0.93%
AUG ’22 SOYBEANS
$ / BSH
15.9825
15.7725
15.8075
-0.16
-1.00%
SEP ’22 SOYBEANS
$ / BSH
15.2775
15.0925
15.1225
-0.1525
-1.00%
NOV ’22 SOYBEANS
$ / BSH
14.93
14.74
14.78
-0.1375
-0.92%
JAN ’23 SOYBEANS
$ / BSH
14.9475
14.77
14.8
-0.1475
-0.99%
MAR ’23 SOYBEANS
$ / BSH
14.82
14.66
14.6925
-0.1375
-0.93%
MAY ’23 SOYBEANS
$ / BSH
14.83
14.6625
14.6725
-0.1575
-1.06%
JUL ’23 SOYBEANS
$ / BSH
14.76
14.665
14.6875
-0.145
-0.98%
MAY ’22 SOYBEAN OIL
$ / LB
85.2
85.2
85.2
-1.3
-1.50%
JUL ’22 SOYBEAN OIL
$ / LB
81.93
79.9
80.34
-1.51
-1.84%
MAY ’22 SOY MEAL
$ / TON
427.7
427
427
0.1
0.02%
JUL ’22 SOY MEAL
$ / TON
421
417
418
-1.9
-0.45%
AUG ’22 SOY MEAL
$ / TON
413.3
409.5
410.3
-2.1
-0.51%
SEP ’22 SOY MEAL
$ / TON
404.8
402.4
403.1
-2.5
-0.62%
OCT ’22 SOY MEAL
$ / TON
398.3
396.1
396.5
-2.5
-0.63%
MAY ’22 Chicago SRW
$ / BSH
10.08
#N/A
10.96
0
0.00%
JUL ’22 Chicago SRW
$ / BSH
11.045
10.8775
10.965
-0.1
-0.90%
SEP ’22 Chicago SRW
$ / BSH
11.045
10.8925
10.97
-0.1025
-0.93%
DEC ’22 Chicago SRW
$ / BSH
11.055
10.905
10.975
-0.105
-0.95%
MAR ’23 Chicago SRW
$ / BSH
11.055
10.91
10.9725
-0.1075
-0.97%
MAY ’22 Kansas City HRW
$ / BSH
0
#N/A
11.6575
0
0.00%
JUL ’22 Kansas City HRW
$ / BSH
11.7425
11.54
11.6475
-0.1225
-1.04%
SEP ’22 Kansas City HRW
$ / BSH
11.7575
11.5725
11.6675
-0.1275
-1.08%
DEC ’22 Kansas City HRW
$ / BSH
11.7775
11.6025
11.68
-0.13
-1.10%
MAR ’23 Kansas City HRW
$ / BSH
11.65
11.58
11.635
-0.1325
-1.13%
MAY ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
12.0425
0
0.00%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.09
11.9825
12.0875
-0.01
-0.08%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.06
11.95
12.04
-0.02
-0.17%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.035
11.9325
12.035
-0.0075
-0.06%
MAR ’23 MLPS Spring Wheat
$ / BSH
11.985
#N/A
12.0025
0
0.00%
JUN ’21 ICE Dollar Index
$
104.105
103.235
103.435
-0.367
-0.35%
JU ’21 Light Crude
$ / BBL
110.85
107.24
110.31
2.05
1.89%
JU ’21 Light Crude
$ / BBL
109.26
105.72
108.8
2.06
1.93%
JUN ’22 ULS Diesel
$ /U GAL
4.0966
4
4.0047
-0.0366
-0.91%
JUL ’22 ULS Diesel
$ /U GAL
3.8618
3.792
3.8072
-0.0132
-0.35%
JUN ’22 Gasoline
$ /U GAL
3.712
3.6334
3.7068
0.0481
1.31%
JUL ’22 Gasoline
$ /U GAL
3.6307
3.5576
3.6236
0.0436
1.22%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
160.325
0
0.00%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
174.375
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
133.775
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
136.025
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
102.8
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
107.075
0
0.00%
MAY ’22 Class III Milk
$ / CWT
24.92
24.92
24.92
-0.02
-0.08%
JUN ’22 Class III Milk
$ / CWT
24.4
24.24
24.39
-0.27
-1.09%
JUL ’22 Class III Milk
$ / CWT
24
#N/A
24.24
0
0.00%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
