Morning report: Corn mixed, soybeans slightly higher on weather concerns. (Comments are updated by 7:30 a.m. Central Time.)
Corn mixed
Soybeans up 6-8 cents; Soymeal up $6.90/ton; Soyoil up $1.95/lb
Chicago wheat up 6-7 cents; Kansas City wheat up 6-7 cents; Minneapolis wheat up 8-12 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates! How does your farm’s crop conditions stack up against other farms around the country? Click this link to take the survey and share updates about your farm’s crop development. I review and upload results daily to the FFTF Google(TM) MyMap, so farmers can see others’ responses from across the country – or even across the county!
Corn
Corn prices edged $0.01-$0.04/bushel lower this morning, though hovered between gains and losses, as crude oil futures flirted with a six-month low overnight. Global economic concerns about a potential recession, which would trigger weaker economic demand, factored back into the equation this morning, limiting upside price potential for energy and corn futures alike.
Some lingering geopolitical concerns between the U.S. and China also surfaced in this morning’s trading session. The corn market losses were limited by hot and dry weather worries in the Midwest.
Ukraine is expected to receive its first cargo vessel since the Russian invasion on Friday. OSPREYS, a Turkish bulk carrier registered in Liberia, is expected to arrive at the Ukrainian port of Chornomorsk, Serhiy Bratchuk, a spokesperson for the regional administration of Odessa announced on social media site Telegram last night.
Indonesia is making plans to expand its domestic corn and sorghum production as the Southeast Asian country struggles to obtain affordable and available wheat supplies due to the ongoing Black Sea conflict. Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, said that the country will earmark 284,171 acres of land for sorghum production in 2023, plus another 380,542 acres in 2024 to the effort.
Airlangga also told media members earlier this week that it would seek to expand corn production in eastern regions of the country, including Papua, West Papua, and North Maluku. Indonesia is the world’s second largest wheat importer. While it just barely cracks into the top 25 for global corn importers, those volumes are likely to increase as global wheat supplies remain scarce.
Soybeans
Weather markets continue to dominate headlines for the U.S. soybean market, though additional support from the global edible oils complex has also played a contributing factor in higher prices this morning. Futures prices traded $0.06-$0.08/bushel higher at last glance.
But worries about simmering diplomatic relations between the U.S. and China continue to play a role in influencing market pricing this morning, limiting the overnight session’s gains on weather concerns.
The soybean market remains torn over concerns about Chinese demand ahead of peak U.S. soybean exports season as well as worries about impending hot and dry temperatures harming yield prospects amid tight domestic soybean supplies.
While some areas of the Heartland have boasted timely rains and adequate growing conditions this summer, other areas are fending off drought conditions. The big question that is on everyone’s mind as peak pod development season begins is, “Will the good areas be able to offset the bad in 2022?”
“We have got some terrifically big areas that are dry,” Don Roose, president of U.S. Commodities in West Des Moines, Iowa, told Reuters. “Does the 70% that is good make up for the 30% that is under stress?”
USDA surprised markets by raising soybean condition ratings 1% in last week’s Crop Progress report. As of last Sunday, 60% of the crop was rated in good to excellent condition.
“I do not think they have necessarily lost it,” Drew Lerner, president of World Weather Inc, assured Reuters. “They could get a rain tomorrow and it could do okay. But it is imperative that they get a rain.”
Palm oil stocks in the world’s second largest palm oil exporter, Malaysia, reportedly rose to an 8-month high overnight. A Reuters survey found that June 2022 palm oil supplies in Malaysia likely grew 8.3% from the previous month to 1.79 million metric tonnes (MMT). It marked the highest point for monthly palm oil production in the Southeast Asian country since November 2021.
Malaysia’s top palm oil competitor, top producer Indonesia, has recently relaxed palm oil export pricing requirements to boost shipping volumes for the world’s largest-produced vegetable oil. However, Indonesia’s export volumes have struggled as of late due to labor shortages causing production delays.
“Lower cash prices, widening palm discount to its nearest rival bean oil and reduced export tax will offer increasing palm export opportunities to Indonesia, fueling competition to Malaysia,” Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics, told Reuters overnight.
Malaysian officials also announced overnight the country was in prime position to cater to top global edible oils buyer India’s growing demand for vegetable oils. Supply, meet demand. I love economics!
Wheat
A string of global wheat purchase announcements overnight (including Iran, Jordan, Japan, and Taiwan) kept a bullish floor under wheat prices this morning. The pending sale announcements helped lift wheat futures back up from a six-month low earlier in the overnight trading session. A stronger dollar also helped fuel the gains, which are likely limited by Ukraine’s grain exporting progress.
Futures prices moved $0.02-$0.12/bushel higher this morning, with Minneapolis futures enjoying the largest gains of the morning on hot and dry weather that could potentially stress the spring wheat crop in the Northern Plains.
Fun facts: Severe drought in Northern Spain this summer could result in olive oil production shortfalls of nearly a third this summer relative to last year. Andalusia, which is the country’s major olive-oil producing region located in Northern Spain, is only expected to produce 1 MMT of olive oil this year, paling in comparison to last year’s harvest of 1.48MMT.
The combination of dwindling water reserves and high heat has been a two-fold factor on olive production in Spain this year. A study by science journal Nature Geoscience published last month found that parts of the Iberian Peninsula, which includes Spain and Portugal, are at the driest conditions experienced in the last 1,200 years.
Here’s the Reuters article if you are a fellow olive oil enthusiast like myself and would like to read more. Enjoy! -JH
Weather
It’s going to be a hot day across the U.S. Plains today, according to NOAA’s short-range forecasts. A band of showers stretching from Southeast Kansas and Eastern Oklahoma up to Michigan and Ohio will keep temperatures in the region somewhat moderated relative to the highs on the Plains today and could drop up to an inch of precipitation along the way.
Showers will continue to hover over the Eastern Corn Belt through the weekend. Dry weather is likely to continue in the Upper Midwest and Plains over the next couple days, though a large band of showers is expected to move into the region this weekend, which could bring relief to soybean plants in peak reproductive phases.
Above average temperatures continue to plague NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday. The persistent dryness in the Heartland is expected to continue through the first half of August. However, the Eastern Corn Belt could see an above average chance for showers early next week.
Financials
The S&P 500 moved 0.19% higher this morning to $4,164.25 on optimism ahead of today’s round of corporate earnings reports. Government bond yields have been slipping as the bond market stabilized following comments from Federal Reserve governors that more interest rate hikes are expected to curb inflation. Bond prices move in the opposite direction of bond yields, so this should be taken as a positive economic sign.
What else I’m reading this morning on our website, FarmFutures.com:
Advance Trading’s Brian Basting explores the accuracy of USDA’s August yield estimates vs. final harvest estimates published in January 2023.
Here are the top highlights from yesterday’s weekly Crop Progress report from USDA.
Bryce Knorr explains how the weather, dollar, and technical signs could point to an early summer bottom for grain prices.
Darren Frye offers three tips to help farm owners lead others through change.
KCoe Isom’s Davon Cook walks farmers though the lifecycle of a family business to help growers manage growth and make better decisions.
Morning Ag Commodity Prices – 8/4/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
5.9225
5.8575
5.89
-0.025
-0.42%
DEC ’22 CORN
$ / BSH
5.97
5.905
5.9375
-0.025
-0.42%
MAR ’23 CORN
$ / BSH
6.0475
5.9825
6.015
-0.0275
-0.46%
MAY ’23 CORN
$ / BSH
6.09
6.0275
6.0575
-0.03
-0.49%
JUL ’23 CORN
$ / BSH
6.1025
6.04
6.0725
-0.025
-0.41%
SEP ’23 CORN
$ / BSH
5.805
5.7575
5.79
-0.015
-0.26%
DEC ’23 CORN
$ / BSH
5.7025
5.6525
5.68
-0.0225
-0.39%
AR2 ’24 CORN
$ / BSH
5.7425
5.7425
5.7425
-0.035
-0.61%
MAY ’24 CORN
$ / BSH
5.8125
5.7725
5.795
-0.0175
-0.30%
AUG ’22 SOYBEANS
$ / BSH
15.52
15.52
15.52
-0.06
-0.39%
SEP ’22 SOYBEANS
$ / BSH
14.09
13.96
14.0825
0.045
0.32%
NOV ’22 SOYBEANS
$ / BSH
13.73
13.595
13.695
-0.0025
-0.02%
JAN ’23 SOYBEANS
$ / BSH
13.81
13.675
13.7725
-0.0025
-0.02%
MAR ’23 SOYBEANS
$ / BSH
13.81
13.6925
13.79
0.0025
0.02%
MAY ’23 SOYBEANS
$ / BSH
13.815
13.71
13.805
0.0125
0.09%
JUL ’23 SOYBEANS
$ / BSH
13.7725
13.675
13.7725
0.0125
0.09%
AUG ’23 SOYBEANS
$ / BSH
13.525
#N/A
13.505
0
0.00%
SEP ’23 SOYBEANS
$ / BSH
0
#N/A
13.0275
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
12.86
12.7725
12.86
0.005
0.04%
AN2 ’24 SOYBEANS
$ / BSH
12.9
#N/A
12.8875
0
0.00%
AUG ’22 SOYBEAN OIL
$ / LB
67.03
67.03
67.03
1.95
3.00%
SEP ’22 SOYBEAN OIL
$ / LB
62
61.03
61.39
-0.43
-0.70%
AUG ’22 SOY MEAL
$ / TON
481.8
480
481.7
0
0.00%
SEP ’22 SOY MEAL
$ / TON
436
430
436
4.6
1.07%
OCT ’22 SOY MEAL
$ / TON
404.3
400
404.3
3.6
0.90%
DEC ’22 SOY MEAL
$ / TON
401
397
401
2.9
0.73%
JAN ’23 SOY MEAL
$ / TON
398.7
394.9
398.3
2.3
0.58%
SEP ’22 Chicago SRW
$ / BSH
7.73
7.5825
7.6575
0.02
0.26%
DEC ’22 Chicago SRW
$ / BSH
7.93
7.78
7.86
0.025
0.32%
MAR ’23 Chicago SRW
$ / BSH
8.1175
7.98
8.055
0.0275
0.34%
MAY ’23 Chicago SRW
$ / BSH
8.235
8.09
8.17
0.035
0.43%
JUL ’23 Chicago SRW
$ / BSH
8.2025
8.07
8.135
0.0175
0.22%
SEP ’23 Chicago SRW
$ / BSH
8.215
8.0975
8.155
0.015
0.18%
DEC ’23 Chicago SRW
$ / BSH
8.275
8.145
8.195
0.0125
0.15%
SEP ’22 Kansas City HRW
$ / BSH
8.4525
8.31
8.3775
0.0225
0.27%
DEC ’22 Kansas City HRW
$ / BSH
8.5375
8.4
8.465
0.0275
0.33%
MAR ’23 Kansas City HRW
$ / BSH
8.5975
8.47
8.52
0.02
0.24%
MAY ’23 Kansas City HRW
$ / BSH
8.605
8.495
8.525
0.0025
0.03%
JUL ’23 Kansas City HRW
$ / BSH
8.4925
8.405
8.445
-0.0025
-0.03%
SEP ’23 Kansas City HRW
$ / BSH
8.4125
8.385
8.385
-0.0375
-0.45%
DEC ’23 Kansas City HRW
$ / BSH
8.43
8.3725
8.385
-0.055
-0.65%
SEP ’22 MLPS Spring Wheat
$ / BSH
8.9
8.7275
8.835
0.0825
0.94%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.0325
8.89
8.97
0.08
0.90%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.1525
9.1025
9.1525
0.1225
1.36%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.2275
9.2275
9.2275
0.105
1.15%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.275
#N/A
9.175
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9
9
9
0.04
0.45%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
8.935
0
0.00%
SEP ’21 ICE Dollar Index
$
106.41
106.025
106.34
-0.037
-0.03%
SE ’21 Light Crude
$ / BBL
91.9
90.15
90.97
0.31
0.34%
OC ’21 Light Crude
$ / BBL
90.88
89.25
90.05
0.31
0.35%
SEP ’22 ULS Diesel
$ /U GAL
3.4512
3.382
3.4235
0.0087
0.25%
OCT ’22 ULS Diesel
$ /U GAL
3.4053
3.3375
3.3803
0.0112
0.33%
SEP ’22 Gasoline
$ /U GAL
2.937
2.8783
2.9017
-0.0105
-0.36%
OCT ’22 Gasoline
$ /U GAL
2.6853
2.635
2.6582
-0.0062
-0.23%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
179.35
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
182.9
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
137.9
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
143.95
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
121
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
95.85
0
0.00%
AUG ’22 Class III Milk
$ / CWT
20.09
20.08
20.09
-0.06
-0.30%
SEP ’22 Class III Milk
$ / CWT
19.76
#N/A
19.9
0
0.00%
OCT ’22 Class III Milk
$ / CWT
20.24
#N/A
20.39
0
0.00%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
