Afternoon report: Wheat incurs heavy losses in Thursday’s session
Grain prices suffered a technical setback today that left corn, soybeans and wheat in the red. Wheat incurred the heaviest losses, spilling 1.5% to 2% lower amid a strengthening U.S. Dollar, lackluster domestic exports and an uptick in Black Sea shipments. Harvest pressure pushed corn and soybeans lower. Corn prices fell nearly 1.25%, with soybeans down around 0.75%.
Outside of the Central Plains, very few areas in the central U.S. are expecting additional rainfall between Friday and Monday, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally dry weather for the Northern Plains and upper Midwest between October 13 and October 19, with cooler-than-normal temperatures emerging in the eastern Corn Belt.
On Wall St., the Dow sank 263 points lower in afternoon trading to 30,010 as investors prepare for some new key jobs data that will be released on Friday. Energy futures trended higher, with crude oil up another 1% this afternoon to $88 per barrel. Gasoline also firmed around 1%, while diesel jumped 5% higher. The U.S. Dollar firmed significantly.
On Wednesday, commodity funds were net buyers of corn (+2,000) and soyoil (+1,000) contracts but were net sellers of soybeans (-5,000), soymeal (-2,500) and CBOT wheat (-500).
Corn
Prices slid more than 1% lower following a round of technical selling on Monday. Bearish factors included a disappointing set of export sales data from USDA (more on that below) coupled with seasonal harvest pressure. December futures dropped 8.25 cents to $6.7575, with March futures down 7.5 cents to $6.8375.
Corn basis bids were mostly steady across the central U.S. on Thursday but did see some movements in either direction today, including a 13-cent drop at an Illinois river terminal and a 6-cent gain at an Illinois ethanol plant.
Corn sales only reached 8.9 million bushels last week. That was below the entire range of trade guesses, which came in between 13.8 million and 31.5 million bushels. Cumulative totals for the 2022/23 marketing year are moderately below last year’s pace so far, with 88.5 million bushels.
Corn export shipments were more robust, with 25.4 million bushels. China, Mexico, Guatemala, Canada and Jamaica were the top five destinations.
Brazil’s Conab estimates that the country’s total corn production in 2022/23 will climb 12.5% above last year’s effort to reach 4.980 billion bushels. Brazilian corn exports are expected to reach 1.772 billion bushels, which would be a year-over-year increase of 21.6%, if realized.
Mexico’s plans to phase out GMO corn use by 2024 could prove quite costly for U.S. farmers, who are the current No. 1 supplier of Mexico’s corn imports. A new study from World Perspectives Inc. suggests that the ban could lower U.S. corn prices by as much as 32%. Farm Futures policy editor Jacqui Fatka has more details on the unfolding situation – click here to learn more.
France’s 2022 corn production may only reach 393.7 million bushels after facing widespread drought and heatwaves throughout the season, per farmer group AGPM (only one-third of the country’s acres are irrigated). If realized, that will put this year’s output at the lowest level in more than three decades. Yields could fall 19% below the prior five-year average, with 117.5 bushels per acre.
Preliminary volume estimates were for 221,083 contracts, tracking moderately higher than Wednesday’s final count of 184,866.
Soybean
Prices suffered a moderate setback after tepid export sales and seasonal harvest pressure triggered a round of technical selling in an often choppy session on Thursday. Prices have fallen to their lowest levels since late July. November futures dropped 9.75 cents to $13.60, with January futures down 8 cents to $13.7250.
Soybean basis bids were steady to mixed after trending 2 cents higher at an Illinois river terminal while dropping 2 to 5 cents lower at two other Midwestern locations on Thursday.
Soybean sales were mostly solid after reaching 28.3 million bushels. That tally was a bit on the lower end of trade estimates, which ranged between 18.4 million and 44.1 million bushels. Cumulative totals for the 2022/23 marketing year are fractionally below last year’s pace so far, with 67.3 million bushels.
Soybean export shipments moved to 22.7 million bushels. The Netherlands, Mexico, China, Taiwan and Spain were the top five destinations.
Brazil’s Conab is expecting a significantly bigger soybean crop for the 2022/23 season, offering its latest production estimate of just under 5.6 billion bushels. That record-breaking effort will be in part due to an expected 3.4% acreage increase. Brazilian soybean exports are expected to reach 3.523 billion bushels this season.
Meantime, a Reuters poll of 12 analysts expects record-large Brazilian soybean plantings this season, with 105.8 million acres. That could lead to a record-breaking production of 5.534 billion bushels. It would also be a significant increase from last season’s disappointing drought-stressed effort. “The beginning of planting is very good, it is moving fast, there is no lack of moisture, the rains are coming to the Midwest and Southeast,” according to Luiz Roque, an analyst with Safras & Mercado.
How are your crops looking this week? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can keep current with peer anecdotes from around the country.
Preliminary volume estimates were for 205,039 contracts, which was slightly above Wednesday’s final count of 184,492.
Wheat
Prices suffered double-digit losses on a variety of factors, including a strengthening U.S. Dollar and improved shipments in the Black Sea region. December Chicago SRW futures fell 18.25 cents to $8.8375, December Kansas City HRW futures lost 21.5 cents to $9.6875, and December MGEX spring wheat futures dropped 16.5 cents to $9.65.
Wheat sales were lackluster last week after only reaching 8.4 million bushels. That was on the very low end of trade guesses, which ranged between 7.3 million and 16.5 million bushels. Cumulative totals for the 2022/23 marketing year have moved fractionally ahead of last year’s pace, with 285.0 million bushels.
Wheat export shipments were healthy after reaching 23.1 million bushels last week. The Philippines, Indonesia, Brazil, China and South Korea were the top five destinations.
Ukraine’s winter wheat planting progress has only reached 27% of its expected footprint for the 2022/23 season, with agribusiness CEO Alex Lissitsa estimating that 2023 production could drop by as much as 70% – “we will cover our own needs, but not everything will be so rosy with exports,” he says. Ukraine’s typical domestic wheat consumption comes in at around 257 million bushels.
As expected, Japan purchased 3.6 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Roughly two-thirds of the total was sourced from the U.S. The grain is for arrival by the end of January.
Preliminary volume estimates were for 74,635 CBOT contracts, moving ahead of Wednesday’s final count of 62,364.
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
