Morning report: Concerns about Russian sentiments regarding the Black Sea Grain Initiative also add uncertainty to wheat, corn markets. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-5 cents
Soybeans down 1-2 cents; Soymeal up $2.40/ton; Soyoil up $0.12/lb
Chicago wheat mixed; Kansas City wheat down 1 cent; Minneapolis wheat down 3-4 cents
*Prices as of 6:55am CDT.
Good morning! I will be presenting a market outlook at Husker Harvest Days this week! Come find me at 10am on Tuesday, Wednesday, and Thursday in the hospitality tent to talk market conditions, crop prospects, and 2023 acreage projections. And stick around if you want to ask questions or talk markets (and lawncare!). See you in Grand Island!
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 MyMap, so farmers can see others’ responses from across the country – or even across the county!
Happy WASDE Day! There will be no updates in today’s reports, though there will be acreage adjustments following the release of prevent plant data from the Farm Service Agency (FSA) and another review of crop insurance data from the Risk Management Agency (RMA) earlier in August.
Market activity will also be generated based on USDA’s potential revisions to international grain and oilseed flows. For all the details, here is a link to my September 2022 WASDE Preview on our website.
As always, follow us at FarmFutures.com and @FarmFutures for the latest report highlights and analysis. USDA releases the WASDE and Crop Production reports at 11am CDT on Monday, September 12. Follow along for all the top insights!
Acreage Updates
On Tuesday, USDA announced that the National Agricultural Statistics Service (NASS) will review and potentially update 2022 acreage estimates based on Farm Service Agency (FSA) and Risk Management Agency (RMA) data.
Translation: NASS will update corn and soybean acreages in next week’s WASDE and Crop Production reports based on Prevent Plant acreage and crop insurance info reported to FSA and RMA earlier this year.
This is not typically standard practice – NASS usually waits until the FSA and RMA have finalized their data and issues revisions in the October Crop Production and WASDE reports. However, a NASS statement released on Tuesday indicated that “the data are sufficiently complete this year to consider adjustments in September.”
Analysts have scrambled over the last couple days to revise their pre-report 2022 U.S. production estimates to account for potential acreage shifts, with all of the trade forecasts just being released last night, with only two business days remaining until USDA releases the September 2022 WASDE and Crop Production report.
So far, it appears that the market is expecting slightly lower corn and soybean acres in Monday’s report with heavier corn acreage losses based on the latest Prevent Plant findings announced from USDA’s Farm Service Agency (FSA) a couple weeks ago. At 3.1 million acres of acres filed for prevent plant for corn, unplanted acreage increased four times from last year. For soybeans, prevent plant acreage doubled from a year ago to just shy of a million acres (987,231 ac.).
USDA-NASS did not resurvey for yields and crop production in August, so there is not likely to be any significant changes to yields in Monday’s report. NASS will likely resurvey farmers to collect that data this month, so expect yield updates in the October 2022 Crop Production and WASDE reports.
Domestic Stocks
Even with the 2021/22 marketing year for corn and soybeans in the books, there are likely to be a few final revisions to usage categories over the next two WASDE reports due to the normal lags in the data collection process USDA experiences in its course of creating these forecasts.
Monday’s report will likely see both corn and soybean stocks widen, based on current trade estimates. Those cutbacks could come from flat corn ethanol production in August as well as slower corn export paces this summer as the dollar soared to new 20-year highs.
For soybeans, it seems most likely that slow export paces over the past couple months will likely result in downward usage (upward ending supply) revisions in Monday’s report. Marketing year to date crush rates through July 2022 remained 3% higher than the same time last year, with signs of accelerating production in July as the unseasonal export uptick slowed.
We are barely two weeks into the 2022/23 marketing year for corn and soybeans, so it may still be too early to tell what kind of usage revisions USDA may have in store in Monday’s report. The trade appeared hesitant to make significant changes to soybean stocks, though it is expecting cuts to corn stocks.
That’s a neutral to bearish outlook for soybean prices on Monday and a bullish forecast for corn. Smaller corn acreage could play a role in this outlook, though with yields struggling across the Northern Hemisphere this summer, it seems likely that USDA will increase export forecasts in Monday’s report.
The trade is anticipating USDA will increase wheat stocks by an average of 8 million bushels on Monday. The bearish outlook means that USDA is likely to make cuts to wheat stocks. Stronger than expected flour milling data released at the beginning of August suggests that cuts to wheat consumption are likely to come from either livestock or export usage.
Global stocks
Northern Hemisphere crop shortfalls due to excessive dryness this summer are likely to tighten corn supplies in Monday’s WASDE report. That’s a bullish omen for corn prices, though any price action will likely be dependent upon USDA’s revisions to 2022/23 U.S. supplies and usage.
Even with expected production losses in Argentina due to recent frost damage and drought stress, wheat supplies are expected to grow in Monday’s WASDE reports, which suggests bearish price action could be in order for the wheat market.
Wheat harvest is on the downward spiral in the Northern Hemisphere, so much of Monday’s movement will likely occur in the imports and exports section of the balance sheet. Top exporter Russia has been struggling to keep pace with the European Union and Ukraine’s exports as buyer remain wary of economic sanctions that continue to keep freight, insurance, and financing costs high for Russian wheat shipments.
For soybeans, all eyes will be on USDA’s adjustments to China’s soybean import for the 2022/23 season. This is where the bears could start to creep into the soybean complex, so it will be worth watching.
USDA’s Foreign Agricultural Service (FAS) attach? in Beijing publishing an updated outlook yesterday, noting that slowing global economic forces are likely to constrict growth prospects for China’s soybean industry in the coming year. China’s livestock production forecasts are also expected to take a hit on tight producer-level margins amid consumer price responsiveness and stiff production competition.
“China’s slowing economy and COVID-related restrictions continue to weaken demand for oilseeds for feed and food use,” the report stated. “Weak demand for vegetable oil in the food service sector and soybean meal in the swine and poultry sectors,” the report also noted.
Plus, a devastating heat wave across south-central China this summer will likely eat into final yields, even though most of the country’s crop in the northern part of the country was spared from heat destruction.
The USDA post now expects China will harvest 665 million bushels of soybeans this fall, down from USDA’s current estimate of 676 million bushels. The attach?’s report forecasts China’s 2022/23 soybean imports 2% (55M bu.) lower to 3.5 billion bushels.
The oilseed market will need some bullish news to keep a floor under prices. Top global edible oil importer, India, could offset some of China’s lower demand as a recent FAS attach? report estimates that imports are likely to pick up momentum in the coming months following monsoon delays.
Corn
Corn futures shed $0.02-$0.05/bushel lower overnight as markets await smaller corn crop volumes in today’s USDA reports. A weaker dollar helped limit some of the early morning losses, but corn complex is decidedly taking a bearish view on today’s trading session.
“The USDA’s Sept. 12 WASDE is fast approaching, and the average trade expectations call for a -1.6% MOM (month-on-month) draw in global corn stocks on a U.S. yield-led production cut,” J.P.Morgan analysts said in a note, as reported by Reuters. “A sharp increase in Russian wheat production and reduction in EU maize production is also likely.”
Soybeans
Soybean prices edged $0.01-$0.02/bushel lower this morning on clear weather forecasts this week that bode favorably for harvest progress across the Heartland. Trading was muted in advance of the morning’s USDA reports, which markets are clearly hoping will offer more fundamental price direction.
Wheat
Wheat prices also drifted lower this morning, down $0.01-$0.03/bushel on lingering uncertainty about Black Sea trade flows. Russia continued its retreat out of Northeastern Ukraine over the weekend and markets remain jittery following Russia’s criticisms of the “Grain Initiative” last week.
Inputs
Demand, meet supply. Norwegian fertilizer producer Yara made moves late last week to acquire the fertilizer business unit of Brazilian state-owned oil company, Petrobras. While neither company has commented on the sale and sources have told Reuters that the deal is not yet in the final stages, it will be widely watched by the markets.
Yara is not the first company to seek expansion opportunities in Brazil this year. Canadian (Brazil Potash) and Australian (Aguia Resources Limited) firms have also announced expansion plans in Brazil over the past month.
Brazil imports most (approx. 85%) of its input needs. But the South American country is likely to experience the most growth in terms of agricultural expansion of any region in the world in the coming years. Hence, it will likely contain most of the growth the fertilizer industry is expected to incur in the coming years.
Weather
While warmth will settle over the Plains today, temperatures are expected to trend seasonably cooler in the Upper Midwest and Eastern Corn Belt today, according to NOAA’s short-range forecasts. Showers will linger over the Great Lakes region today, bringing up to an inch of accumulation to Wisconsin and Northern Michigan. Light precipitation is expected along the I-80 corridor along the southern portion of Lake Michigan.
Yard update: We mowed our new seedlings for the first time this weekend and they are THRIVING! I cannot recommend drought-resistant grass blends enough. Our lawn looks spectacular already!
We have a few bare spots we are trying to patch in before peak fall grass planting ends. We are also trying to figure out the best herbicide blend to keep our never-ending crop of weeds at bay. I’ve already flashed my lawn once this month with Tenacity (shout out to the Syngenta rep at Farm Progress show who gave me a hard time for doing so!) and we sprayed de-amine yesterday because those weeds just won’t quit! At any rate, the grass looks good, and we are thrilled with the progress we’ve made so far this year.
The 6-10-day NOAA outlook is forecasting above average chances for excessive heat for most of the country, except the West Coast, over the next 10 days. The Upper Midwest, Northern Plains, and Pacific Northwest will likely see above average chances for rain during that time while the Eastern Corn Belt and Central and Southern Plains trend dryer.
The 8-14 day NOAA outlook is trending warmer and slightly dryer for the end of September. The Great Lakes region will see normal chances of precipitation during that time, though it will likely dry remain dry elsewhere in the Heartland, favoring harvest progress.
Financials
“Growing global hunger and famine” has often been cited by the media as a key reason to sanction Russia for its invasion of Ukraine. But here is where the real hunger pains are actually being felt and the constraints these countries (primarily in East Africa) are facing.
S&P 500 futures drifted 0.47% higher this morning to $4,086.50 as markets hope for lower August 2022 inflationary readings expected this week. Bargain buyers lifted oil prices this morning, which continue to face headwinds as the world braces for an economic contraction.
What else I’m reading this morning on our website, FarmFutures.com:
Three consecutive years of La Ni?a? Bryce Knorr weighs the odds of crop damage in the U.S. and South America on the persistent weather patterns.
Naomi Blohm explains how high interest rates and more Chinese slowdowns due to COVID are influencing commodity demand.
Roger Wright uses a cautionary tale from 1988 to warn farmers against potential hedging blunders.
For farms operating multiple enterprises under one roof, here are eight tips to make both the farm and the side hustle(s) successful.
Farm Futures’ 2023 Acreage Projections are live on our website. Spoiler alert: corn and winter wheat are poised to reign supreme next year.
Morning Ag Commodity Prices – 9/12/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.96
6.9025
6.96
-0.025
-0.36%
DEC ’22 CORN
$ / BSH
6.8725
6.785
6.805
-0.045
-0.66%
MAR ’23 CORN
$ / BSH
6.91
6.825
6.8475
-0.045
-0.65%
MAY ’23 CORN
$ / BSH
6.91
6.8275
6.8525
-0.04
-0.58%
JUL ’23 CORN
$ / BSH
6.8575
6.775
6.8
-0.035
-0.51%
SEP ’23 CORN
$ / BSH
6.4375
6.38
6.43
0
0.00%
DEC ’23 CORN
$ / BSH
6.2775
6.2025
6.2425
-0.02
-0.32%
AR2 ’24 CORN
$ / BSH
6.345
6.32
6.345
0.015
0.24%
MAY ’24 CORN
$ / BSH
6.3625
6.3575
6.3625
0.005
0.08%
SEP ’22 SOYBEANS
$ / BSH
14.805
14.725
14.725
-0.1675
-1.12%
NOV ’22 SOYBEANS
$ / BSH
14.1975
14.0225
14.1175
-0.005
-0.04%
JAN ’23 SOYBEANS
$ / BSH
14.2475
14.0725
14.1675
-0.0075
-0.05%
MAR ’23 SOYBEANS
$ / BSH
14.2575
14.105
14.195
-0.0075
-0.05%
MAY ’23 SOYBEANS
$ / BSH
14.29
14.1375
14.2375
0.0075
0.05%
JUL ’23 SOYBEANS
$ / BSH
14.26
14.1175
14.1975
-0.015
-0.11%
AUG ’23 SOYBEANS
$ / BSH
14.0925
#N/A
14.035
0
0.00%
SEP ’23 SOYBEANS
$ / BSH
13.6125
13.6075
13.6125
-0.0425
-0.31%
NOV ’23 SOYBEANS
$ / BSH
13.5325
13.41
13.5275
0.025
0.19%
AN2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.5325
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.4675
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
69.39
69.39
69.39
-0.86
-1.22%
OCT ’22 SOYBEAN OIL
$ / LB
67.06
65.97
66.85
0.17
0.25%
SEP ’22 SOY MEAL
$ / TON
454.4
450
450
9.1
2.06%
OCT ’22 SOY MEAL
$ / TON
419.1
413.8
417.2
2.4
0.58%
DEC ’22 SOY MEAL
$ / TON
414.3
409.3
412.2
1.5
0.37%
JAN ’23 SOY MEAL
$ / TON
411.2
406.5
408.7
0.9
0.22%
MAR ’23 SOY MEAL
$ / TON
406.5
401.8
404.3
1
0.25%
SEP ’22 Chicago SRW
$ / BSH
8.525
8.525
8.525
-0.0075
-0.09%
DEC ’22 Chicago SRW
$ / BSH
8.78
8.5525
8.7
0.005
0.06%
MAR ’23 Chicago SRW
$ / BSH
8.9225
8.705
8.845
0.005
0.06%
MAY ’23 Chicago SRW
$ / BSH
8.99
8.7825
8.91
0.005
0.06%
JUL ’23 Chicago SRW
$ / BSH
8.92
8.73
8.8375
-0.0025
-0.03%
SEP ’23 Chicago SRW
$ / BSH
8.935
8.755
8.86
-0.0025
-0.03%
DEC ’23 Chicago SRW
$ / BSH
8.995
8.855
8.9425
0.01
0.11%
SEP ’22 Kansas City HRW
$ / BSH
8.5
#N/A
9.2925
0
0.00%
DEC ’22 Kansas City HRW
$ / BSH
9.3625
9.1475
9.285
-0.0075
-0.08%
MAR ’23 Kansas City HRW
$ / BSH
9.36
9.1525
9.28
-0.0175
-0.19%
MAY ’23 Kansas City HRW
$ / BSH
9.3475
9.165
9.275
-0.015
-0.16%
JUL ’23 Kansas City HRW
$ / BSH
9.225
9.04
9.16
-0.0025
-0.03%
SEP ’23 Kansas City HRW
$ / BSH
9.18
9.06
9.18
0.06
0.66%
DEC ’23 Kansas City HRW
$ / BSH
9.1
9.1
9.1
-0.0625
-0.68%
SEP ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
9.0975
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.3175
9.1275
9.25
-0.025
-0.27%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.42
9.2575
9.36
-0.0325
-0.35%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.4625
9.35
9.455
-0.0125
-0.13%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.405
9.405
9.405
-0.065
-0.69%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.1975
9.08
9.1975
0.0275
0.30%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.155
#N/A
9.1375
0
0.00%
SEP ’21 ICE Dollar Index
$
108.865
107.8
108.13
-0.867
-0.80%
OC ’21 Light Crude
$ / BBL
87.75
85.16
87.51
0.72
0.83%
NO ’21 Light Crude
$ / BBL
87.32
84.78
87.08
0.72
0.83%
OCT ’22 ULS Diesel
$ /U GAL
3.6373
3.5589
3.6302
0.0515
1.44%
NOV ’22 ULS Diesel
$ /U GAL
3.5729
3.5008
3.5605
0.0421
1.20%
OCT ’22 Gasoline
$ /U GAL
2.4565
2.3951
2.4536
0.0205
0.84%
NOV ’22 Gasoline
$ /U GAL
2.4154
2.3574
2.4144
0.0206
0.86%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
183
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
185.575
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
145.675
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
150.975
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
93.175
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
83.125
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.74
#N/A
19.79
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.05
20.93
20.97
0.04
0.19%
NOV ’22 Class III Milk
$ / CWT
21.71
21.6
21.6
0.05
0.23%
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