Morning report: Corn, soybeans and wheat all firm ahead of Monday’s session. (Comments are updated by 7:30 a.m. Central Time.)
Overnight trends:
Corn: Up 10 to 11 cents
Soybeans: Up 10 to 13 cents
Wheat: Up 19 to 24 cents
Grain prices have struggled to find much positive forward momentum so far this summer, but a missile strike in a key Ukrainian port city over the weekend raised fresh concerns about the country’s ability to safely ship its growing grain stockpile. Wheat prices were lifted more than 2.5% overnight, with corn rising 1.75% and soybeans firming by around 0.75%.
Overseas stock markets were once again mixed. Asian markets closed with losses of around 0.5% to 0.75%. European markets were mostly 0.25% to 0.5% firm in midday trading. On Wall St., Dow futures trended 167 points higher to 32,042 as investors await another round of corporate earnings reports and the next interest rate signals from the Federal Reserve.
Energy futures tracked moderately higher overnight. Crude oil firmed 1.25% to around $96 per barrel, although general demand concerns still linger. Gasoline and diesel were also up around 1.25%. The U.S. Dollar softened moderately, while safe-haven gold inched 0.25% higher.
The latest 72-hour precipitation map from NOAA shows a big band of rains delivering drought-busting relief between northern Missouri and southern Ohio between today and Thursday. Some areas will see more than 2″ over the next three days. Official 6-to-10-day forecasts show more wetter-than-normal conditions likely for parts of the eastern Corn Belt, Southern Plains and Mid-South between July 30 and August 3, with seasonally hot weather likely for most of the country during this time.
On Friday, commodity funds were net buyers of soybeans (+6,000) and soyoil (+4,000) contracts but were net sellers of corn (-6,000), soymeal (-3,000) and CBOT wheat (-20,000).
NOTE: How do your farm’s crop conditions stack up against other operations around the country? Click this link to take the Feedback from the Field survey and share updates about your farm’s crop development. We review and upload results regularly to the FFTF Google MyMap, so farmers can see others’ responses from across the country.
Corn
Corn prices posted solid gains overnight as traders continue to balance the latest weather forecasts (which are mostly favorable) against fresh turmoil in Ukraine as the country attempts to manage the ongoing Russian invasion. Spillover strength from wheat was also supportive ahead of Monday’s session.
Corn basis bids were steady to mixed last Friday, trending as much as 10 cents higher at an Iowa river terminal and as much as 25 cents at an Indiana ethanol plant.
USDA releases its next round of crop progress data this afternoon. Through July 17, 64% of this season’s corn crop was rated in good-to-excellent condition, with 37% of the crop silking (vs. the prior five-year average of 48%) and 6% at dough stage (vs. the prior five-year average of 7%).
Ukraine’s 2022/23 grain exports are down nearly 40% year-over-year so far, according to the country’s agriculture ministry. That includes 30.2 million bushels of corn and 8.2 million bushels of wheat since the beginning of July.
The next FarmProgress365 seasonal sessions arrive later this week and focus on harvest preparation strategies and a timely look at the latest grain market trends. The free interactive sessions take place July 26-28 – click here to learn how you can participate.
The preliminary report from the CBOT showed daily futures volume increase to 303,702, with open interest also firming by 6,121. Options volume moved sharply higher to 182,625 and more heavily favors calls (115,811) over puts (66,814). Implied volatility for near-the-money September contracts fell to 34.8% and don’t expire for another 31 days.
Soybeans
Soybean prices were content to shift around 0.75% higher overnight on a round of technical buying largely spurred by spillover strength from a broad range of other commodities, including corn, wheat and crude oil. Traders will have some additional data from USDA to digest later today, including agency updates on export inspections, crop progress and quality ratings.
Last Friday, soybean basis bids were steady to weak across the central U.S. after eroding 5 to 20 cents lower at five Midwestern processors and tumbling as much as 80 cents lower at an Ohio river terminal.
Monday afternoon brings the next round of crop progress updates from USDA. Through July 17, 61% of this season’s soybean crop was rated in good-to-excellent condition. Physiologically, 48% was blooming and 14% was setting pods – both categories are trending moderately below the prior five-year average.
Rising interest rates could have some negative long-term implications for some farming operations – especially those in the middle of succession planning. Jennifer Latzke with Kansas Farmer recently talked with Kansas State University ag economist Brian Briggeman at some of the key issues in the mix – click here to learn more.
The preliminary report from CBOT showed daily futures volume ease to 157,926 while open interest also fell 12,357. Options volume improved to 70,481 and still moderately favors calls (44,921) over puts (25,560). Implied volatility for near-the-money September contracts fell to 25.3% and expire in another 31 days.
Wheat
Wheat prices posted solid gains overnight after Russian missile strikes in Odesa triggered a round of technical buying. Prices have cooled considerably in recent weeks, thanks in large part to harvest progress across the Northern Hemisphere that has replenished waning global stocks. Even so, keep a close eye on Ukraine, which continues to face significant production and export struggles amid the ongoing Russian invasion.
What sort of winter wheat harvest progress was made this past week? Through July 17, 70% of the crop had been harvested, just below the prior five-year average of 71%. USDA releases its next round of data later this afternoon.
Last Friday, Russia, Ukraine, Turkey and the United Nations signed a deal to reopen three Black Sea ports to grain exports. Despite this progress, Russia fired missiles on the Ukrainian port city Odesa over the weekend. “The Russians have created doubt about the safety of ports hardly before the ink was dry on the shipping agreement,” one European trader told Reuters. Even as container traffic reopens in the Black Sea, plenty of questions about insurance and other logistical concerns remain.
Russian consultancy Sovecon now estimates that the country’s July wheat exports will reach 80.8 million bushels. That would double totals from June, if realized. Russia is the world’s No. 1 wheat exporter.
Pakistan receive several offers in its international tender to purchase 7.3 million bushels of wheat from optional origins that closed later today. The grain is for shipment during the first half of September. No purchases have been reported at this time, however.
The preliminary report from CBOT showed daily SRW volume rise to 120,431, with open interest up 6,390. Options volume firmed to 55,637 and moderately favors calls (32,683) over puts (22,954). Implied volatility for September near-the-money options fell to 43.6% and don’t expire for another 31 days.
Volume in HRW wheat increased to 49,685, with open interest trending 2,931 higher. Options volume is at 4,364 and moderately favors calls (2,676) over puts (1,688).
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