Morning report: Corn, wheat edge down while markets await the Federal Reserve’s interest rate hike today. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-6 cents
Soybeans mixed; Soymeal up $1.40/ton; Soyoil up $0.14/lb
Chicago wheat down 1-2 cents; Kansas City wheat down 6-7 cents; Minneapolis wheat down 7-12 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates! It’s the busiest time of year across the Heartland as farmers finish up planting spring 2022 crops and begin crop protection activities over the next few weeks. While our FFTF responses have trended lower over the past week, we are still receiving valuable insights from farm country.
Check out our newest Feedback from the Field column for all of the latest insights straight from the fields!
I have recently updated our survey to reflect current growing conditions, so you can share updated crop progress from your area as often as you would like through the survey portal! 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 $0.01-$0.06/bushel overnight on rising inflation across the world. Losses in the financial markets are beginning to spill over into the commodities sector despite tight supplies for global grain and oilseeds.
“Global trends in inflation and growth are increasingly a concern, and worryingly, a recessionary base case is where many investors appear to be heading,” said Stephen Innes, managing partner at SPI Asset Management.
Soybeans
Soybean prices were slated to post their first price uptick in four trading sessions this morning as a heat wave across the Corn Belt raised concerns about crop development. New crop prices rose $0.03-$0.05/bushel while 2023 prices edged $0.02-$0.03/bushel lower. Gains were limited by broad financial market downturns in recent days as the world struggles to combat rising inflation.
China’s sow herd is down 0.2% at the end of April from a month prior, according to data released by the Chinese agriculture ministry overnight. At 41.77 million head, the April 30 sow inventory reading was also 4.3% lower than a year ago.
China’s hog population was at a surplus as it tried to rebuild after the devastating 2018 African swine fever epidemic. But the market is again moderating to accommodate for high soybean feed prices and ongoing urban lockdown measures to combat COVID-19.
The National Oilseed Processors’ Association (NOPA) releases its estimates for May 2022 soybean crushing volumes today. Soy crush facilities with NOPA memberships handle approximately 95% of the soybean bushels allocated for crushing in the U.S.
Though cash bids across the Midwest yesterday edged lower, spot prices are largely trading between a $0.09-$1.35/bushel premium to July and August futures prices as domestic processors face unseasonable competition from Chinese export buyers.
Higher absolute domestic production is likely to be the theme of today’s NOPA crush estimates for May 2022. Pre-repot analyst estimates range between 165.4 million – 175.0 million bushels with an average guess of 171.6 million bushels.
If the average estimate is realized today, then it will be the largest May NOPA soy crush volume on record, surpassing the previous high or 169.6 million bushels in May 2020. It would also be a 5% increase in month-over-month crush volumes.
But it also signals that daily crush rates are likely to continue a three-month decline, which adds a bit of nuance to what initially appears to be a bullish demand signal. Spring maintenance schedules have triggered some plant closures in recent weeks, leaving the May 2022 daily crush rate at an estimated 5.5 million bushels/day. The peak daily rate in the 2022/23 marketing year was likely set in December 2021 at 6.0 million bushels/day.
This is not an unusual trend. Monthly crush rates tend to taper off in the summer months as the market prepares for the incoming harvest and farmers empty their bins of old crop supplies. Over the past few weeks, farmers have been less willing to book new cash sales as they await higher prices.
Wheat
Even with a slightly weaker dollar, U.S. wheat futures shed $0.01-$0.12/bushel overnight amid rising global inflationary concerns in the wider financial markets. Hot and dry weather in the Southern Plains is favorable for winter wheat harvesting, sending hard red winter wheat futures $0.05-$0.06/bushel lower.
Rains in the Upper Midwest yesterday and today are likely to help improve growing conditions for spring wheat crops, sending Minneapolis futures $0.07-$0.12/bushel lower.
Ukraine
President Joe Biden announced yesterday that the U.S. would help Ukraine build temporary storage facilities at Ukraine’s border with Poland in an effort to relieve rail bottlenecks for Ukrainian grain exporters.
Ukraine’s agriculture minister expects that the ongoing Russian-Ukrainian war will keep wheat prices at record highs for at least three years as the war keeps Ukrainian grain off the market during that time.
Inputs
Fuel markets have largely traded sideways this week, though they remain at elevated levels. Crude oil futures closed yesterday’s trading session nearly 1% lower but price pain for buyers continues to persist just above the $121/barrel benchmark.
As farmers finish up crop protection activities, their focus will likely turn to harvest preparation. Given the late start to the 2022 growing season, dryer fuel may be high on farmers’ buying list this summer.
The market could provide some seasonal price breaks for growers, as I outline in my latest E-corn-omics column. But there is a strong chance that the window to minimize fall fuel expenses will likely be a narrow one this summer, given ongoing production issues. Check out my column for all the latest intel on the fuel market!
Weather
Hot temperatures in the Upper Midwest will ease today, according to NOAA’s short-range forecasts. Blistering temperatures will continue to roast the Southern Plains and Eastern Corn Belt.
Showers and thunderstorms will linger over the Upper Midwest over the next 24 hours, dropping up to an inch and a half of rain over abnormally dry areas of Wisconsin. Surrounding states are likely to only see up to a half inch of accumulation.
NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are trending hot for the Heartland but with above average chances of moisture for the Mountain West (!) and dry conditions for the Corn Belt.
Financials
Markets were on the upswing this morning ahead of the conclusion of the Federal Reserve’s Federal Open Market Committee (FOMC) today. Markets expect the FOMC will increase interest rates by 0.75% – the largest rate hike since 1994. Fed chairman Jerome Powell had previously indicated that all future rate hikes would not be more than 0.25% after a 0.5%-increase after the early May 2022 FOMC meeting.
But that was before inflation continued to spiral during May, when it reached a four-decade peak of 8.6% after slightly abating in April. The Fed is likely to step up its aggressiveness in fighting inflation over the next couple days and that will likely take a bite out of any gains the market earns this morning.
Faster-than-planned Fed rate hikes have been a key contributor to the recent Wall Street selloff that has pushed the S&P 500 index into bearish territory.
At last glance, the S&P 500 traded 0.47% higher to $3,758.00. European stock indices also edged higher this morning after the European Central Bank (ECB) called an emergency meeting to reign in bond market disruptions.
What else I’m reading this morning on our website, FarmFutures.com:
Mike Downey has the right tax-friendly steps on how to get farmland out of a corporation.
What can farmers learn from the crypto currency meltdown? Advance Trading’s Ryan Fogel has a few pointers.
Bryce Knorr implores you to not get too hung up on USDA’s corn ratings too early in the season.
Our team’s June 2022 WASDE coverage!
“Look but don’t touch,” is increasingly becoming the theme of the market volatility surrounding Ukrainian grain, writes AgMarket.Net’s Brian Splitt.
Morning Ag Commodity Prices – 6/15/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.6825
7.62
7.6575
-0.025
-0.33%
SEP ’22 CORN
$ / BSH
7.29
7.2225
7.25
-0.045
-0.62%
DEC ’22 CORN
$ / BSH
7.2175
7.15
7.18
-0.0325
-0.45%
MAR ’23 CORN
$ / BSH
7.265
7.2025
7.23
-0.0325
-0.45%
MAY ’23 CORN
$ / BSH
7.275
7.22
7.22
-0.06
-0.82%
JUL ’23 CORN
$ / BSH
7.235
7.185
7.21
-0.035
-0.48%
SEP ’23 CORN
$ / BSH
6.6925
6.6925
6.6925
-0.0125
-0.19%
JUL ’22 SOYBEANS
$ / BSH
17.035
16.8625
16.955
-0.03
-0.18%
AUG ’22 SOYBEANS
$ / BSH
16.265
16.115
16.2
0.035
0.22%
SEP ’22 SOYBEANS
$ / BSH
15.5825
15.4375
15.53
0.0575
0.37%
NOV ’22 SOYBEANS
$ / BSH
15.345
15.2175
15.29
0.0375
0.25%
JAN ’23 SOYBEANS
$ / BSH
15.3775
15.26
15.3375
0.045
0.29%
MAR ’23 SOYBEANS
$ / BSH
15.2475
15.1425
15.1575
-0.02
-0.13%
MAY ’23 SOYBEANS
$ / BSH
15.2025
15.115
15.115
-0.0225
-0.15%
JUL ’23 SOYBEANS
$ / BSH
15.1475
15.0725
15.0725
-0.0275
-0.18%
AUG ’23 SOYBEANS
$ / BSH
0
#N/A
14.84
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
78.84
77.5
78.49
0.21
0.27%
AUG ’22 SOYBEAN OIL
$ / LB
76.74
75.33
76.24
-0.08
-0.10%
JUL ’22 SOY MEAL
$ / TON
413.5
409.1
412.2
1.2
0.29%
AUG ’22 SOY MEAL
$ / TON
403.2
399.1
401.7
1.1
0.27%
SEP ’22 SOY MEAL
$ / TON
396.9
392.6
394.9
1
0.25%
OCT ’22 SOY MEAL
$ / TON
392.4
388.3
390.4
0.9
0.23%
DEC ’22 SOY MEAL
$ / TON
394.3
389.5
392.3
1.5
0.38%
JUL ’22 Chicago SRW
$ / BSH
10.55
10.365
10.49
-0.0125
-0.12%
SEP ’22 Chicago SRW
$ / BSH
10.7
10.515
10.64
-0.0125
-0.12%
DEC ’22 Chicago SRW
$ / BSH
10.85
10.68
10.8
-0.0125
-0.12%
MAR ’23 Chicago SRW
$ / BSH
10.92
10.78
10.9075
-0.0075
-0.07%
MAY ’23 Chicago SRW
$ / BSH
10.9575
10.815
10.9125
-0.04
-0.37%
JUL ’22 Kansas City HRW
$ / BSH
11.45
11.2575
11.3675
-0.055
-0.48%
SEP ’22 Kansas City HRW
$ / BSH
11.515
11.3275
11.44
-0.0525
-0.46%
DEC ’22 Kansas City HRW
$ / BSH
11.58
11.42
11.52
-0.0575
-0.50%
MAR ’23 Kansas City HRW
$ / BSH
11.6475
11.4825
11.575
-0.0575
-0.49%
MAY ’23 Kansas City HRW
$ / BSH
11.435
11.435
11.435
-0.135
-1.17%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.0975
11.9325
12.0075
-0.0775
-0.64%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.085
11.92
11.9975
-0.0875
-0.72%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.0725
11.94
11.985
-0.1175
-0.97%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.1275
11.9775
12.0075
-0.1325
-1.09%
MAY ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
12.135
0
0.00%
SEP ’21 ICE Dollar Index
$
105.21
104.555
104.705
-0.637
-0.60%
JU ’21 Light Crude
$ / BBL
119.61
116.99
118.22
-0.71
-0.60%
AU ’21 Light Crude
$ / BBL
116.93
114.36
115.57
-0.69
-0.59%
JUL ’22 ULS Diesel
$ /U GAL
4.4158
4.3557
4.406
0.012
0.27%
AUG ’22 ULS Diesel
$ /U GAL
4.2815
4.2256
4.2711
0.0058
0.14%
JUL ’22 Gasoline
$ /U GAL
4.041
3.9322
3.9551
-0.0387
-0.97%
AUG ’22 Gasoline
$ /U GAL
3.8877
3.78
3.8096
-0.0323
-0.84%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
171.3
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
173.35
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
135.2
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
134.075
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
106.625
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
103.55
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.27
24.27
24.27
-0.04
-0.16%
JUL ’22 Class III Milk
$ / CWT
24.2
24.17
24.17
-0.08
-0.33%
AUG ’22 Class III Milk
$ / CWT
24.38
24.35
24.38
-0.01
-0.04%
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