Afternoon report: Wheat succumbs to a round of profit-taking Thursday; corn narrowly mixed
Grain prices were mixed today amid some uneven technical maneuvering. Wheat prices continued to fade lower on another round of profit-taking, despite some not-so-good yield reports coming out of Kansas. Soybeans showed some moderate upside, in contrast, rising 1.5% higher on a round of technical buying partly spurred by export optimism following a healthy round of sales data from USDA this morning. Corn prices weren’t able to move the needle much in either directions, finishing the session with narrowly mixed results.
More wet weather is rolling across the central U.S. later this week, with a band stretching from Arkansas to Michigan likely to see another 0.75″ or more between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts more seasonally wet weather for much of the Corn Belt between May 26 and June 1, with most of the U.S. likely to see warmer-than-normal conditions during that time.
On Wall St., the Dow continued to slide lower, losing another 192 points in afternoon trading to 31,298 amid growing concerns that inflation trends are clipping corporate profits. Energy futures moved higher in a volatile session today. Crude oil firmed 2.25% to $112 per barrel. Gasoline rose 2.5%, with diesel up 3%. The U.S. Dollar softened significantly.
On Wednesday, commodity funds were net buyers of soymeal (+1,500) contracts but were net sellers of corn (-20,500), soybeans (-8,000), soyoil (-6,500) and CBOT wheat (-15,000).
Corn
Corn prices failed to gather much momentum – either higher or lower – in a sometimes-choppy session on Thursday. Prices did show some signs of improvements after starting the day with moderate overnight losses. July futures firmed 0.75 cents to $7.8225, but September futures dropped 3.75 cents to $7.4950.
Corn basis bids were largely steady across the central U.S. on Thursday but did tilt 5 cents higher at an Illinois processor today.
Old crop corn sales were up noticeably versus the prior week, with 17.1 million bushels in the week through May 12. New crop sales contributed another 23.2 million bushels, for a total of 40.3 mil-lion bushels. That was near the middle of analyst estimates, which came in between 25.6 million and 53.1 million bushels. Cumulative totals for the 2021/22 marketing year are still trending moderately below last year’s pace, with 1.690 billion bushels.
Corn export shipments shifted 8% lower week-over-week and 11% below the prior four-week average, with 54.3 million bushels. Mexico was the No. 1 destination, with 14.4 million bushels.
The International Grains Council trimmed its estimates for 2022/23 global corn production to 1.184 billion metric tons, citing likely reductions for the United States and Ukraine this season.
According to the latest data from the EPA, the U.S. generated 1.14 billion ethanol blending credits in April, down from March’s tally of 1.27 billion. The U.S. also generated 498 million biodiesel blending credits last month, up from 490 million in March.
South Korea purchased 2.7 million bushels of animal feed corn sourced from South America in an international tender that closed earlier today. The grain is for arrival in late August.
Preliminary volume estimates were for 178,186 contracts, falling moderately short of Wednesday’s final count of 243,546.
Soybeans
Soybean prices shook off moderate overnight losses after a healthy round of export data from USDA this morning sparked some technical buying that moved prices around 1.5% higher by the close. July futures rose 28 cents to $16.9075, with August futures up 23.25 cents to $16.3025.
Soybean basis bids were steady to firm after trending 5 to 15 cents higher across seven Midwestern locations on Thursday.
Soybean exports saw old crop sales jump 65% above the prior four-week average, with 27.7 million bushels. New crop sales added another 5.5 million bushels, for a total of 33.2 million bushels. That was toward the higher end of trade estimates, which ranged between 7.3 million and 40.4 million bushels. Cumulative totals for the 2021/22 marketing year are still running moderately behind last year’s pace, with 1.790 billion bushels.
Soybean export shipments firmed 45% above the prior four-week average, with 35.2 million bushels. Egypt topped all destinations, with just under 10.0 million bushels.
Governmental officials in Egypt report that the country’s strategic reserves of vegetable oils are sufficient for the next five and a half months. Egypt is a major importer of several commodities, including vegetable oils, wheat and more.
Planting pace picked up this past week but remains sluggish compared to recent years. Naomi Blohm, senior market adviser with Stewart Peterson, says two states in particular – Minnesota and North Dakota – will be worth monitoring moving forward. Those two states have made a significantly slow start to the 2022 season due to plenty of unfavorable weather conditions earlier this spring. Blohm offers a fresh batch of analysis in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 144,492 contracts, shifting slightly below Wednesday’s final count of 149,467.
Wheat
Wheat prices faded again on a round of technical selling as traders continued to lock in prices that still remain near record levels. Expectations for a possible record-breaking crop in Russia applied additional headwinds today. July Chicago SRW futures fell 28.5 cents to $12.0225, July Kansas City HRW futures lost 28.25 cents to $12.9625, and July MGEX spring wheat futures dropped 20 cents to $13.3275.
Old crop wheat sales were disappointing, with just 312,000 bushels. New crop sales fared better, adding another 12.0 million bushels and bringing the total to 12.3 mil-lion bushels. That was on the upper end of trade estimates, which ranged between zero and 14.7 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace, with 656.2 million bushels.
Wheat export shipments inched 1% above the prior four-week average, with 12.7 million bushels. Nigeria was the No. 1 destination, with 2.8 million bushels.
The results of the annual Wheat Quality Council tour across Kansas show the Sunflower State’s winter wheat yield potential is at the lowest level since 2018, with an average of 39.7 bushels per acre – falling well short of the prior five-year average of 47.4 bpa. Kansas is the top winter wheat producer in the U.S.
The International Grains Council lowered its 2022/23 global wheat production estimates by around 404 million bushels for a new total of 28.256 billion bushels. Lower forecasts for production in the United States, Ukraine and India was partially offset by improvements in Russia’s crop.
A heatwave in India means a record-breaking production effort is unlikely to come to fruition for the 2021/22 season. Production potential has declined 4.4% from earlier estimates, falling to 3.910 billion bushels.
Japan purchased 6.4 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 34% was sourced from the U.S. The grain is for shipment in July.
Jordan issued a new international tender to purchase 4.4 million bushels of milling wheat from optional origins that closes on May 24. This follows a similar tender that closed earlier this week with Jordan passing on the single offer submitted. If it closes a deal on this tender, the grain will be for shipment in August and September.
Preliminary volume estimates were for 77,749 CBOT contracts, which was 22% lower than Wednesday’s final count of 100,313.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
789.75
773.25
783.25
0.75
22-Sep
756.75
741.75
750.5
-3.75
Soybeans
22-Jul
1697
1660.75
1690.5
28
22-Sep
1562
1529.75
1558.75
19
Soymeal $/ton
22-Aug
425
409.2
420.6
11.6
Soyoil cents/lb
22-Jul
78.42
76.17
77.19
-0.83
Wheat $/bushel
22-Jul
1247.75
1193.5
1200.5
-28.5
22-Sep
1249.25
1197.25
1206
-24.75
KC Wheat
22-Jul
1345.25
1277.5
1295.25
-28.25
22-Sep
1348
1281.5
1299
-26.25
MPLS Wheat
22-Jul
1383
1323.75
1330.5
-20
22-Sep
1380
1322.5
1329
-20.25
Live Cattle cents/lb
22-Jun
132.25
131.2
131.675
0.175
Feeder Cattle cents/lb
22-Aug
166.125
164.6
165.275
-0.525
Lean Hogs cents/lb
22-Jul
108.475
106.3
107.025
-1.5
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
112.45
105.13
112.01
2.42
Diesel
22-Jun
3.8019
3.5248
3.7936
0.1255
Unleaded Gasoline $/gallon
22-May
3.8333
3.5435
3.8296
0.109
Natural Gas
22-Jul
8.591
8
8.356
-0.099
U.S. Dollar Index
22-Jun
103.935
102.695
102.73
-1.132
Gold $/ounce
22-Jun
1848.2
1808.4
1812.2
-3.7
Copper
22-May
4.2765
4.1815
4.2765
0.0945
Fertilizer Swaps
(as of 05/13)
DAP Tampa-index
1,130.0
-45
DAP-New Orleans
935.9
-20.39
Urea-New Orleans
705.5
-8.27
Urea-Middle East
772.5
-72.5
Urea-Black Sea
585.0
0
UAN (32%) New Orleans
694.5
0
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