Morning report: Corn, soybeans and wheat all trend higher heading into Friday’s session. (Comments are updated by 7:30 a.m. Central Time.)
Overnight trends:
Corn: Up 1 to 2 cents
Soybeans: Up 1 to 2 cents
Wheat: Up 12 to 15 cents
Grain prices have seen a fair amount of volatility in recent sessions and hope to end the week on a positive note after some technical buying overnight. Corn and soybean prices each trended around 0.4% higher, while wheat prices jumped 1.5% higher on some bargain buying after suffering moderate setbacks earlier in the week.
Overseas stock markets were mixed but mostly lower. Asian markets closed with losses ranging between 0.5% and 1.5%. European markets were narrowly mixed in midday trading. On Wall St., the Dow tested modest gains, rising 25 points higher to 30,007 as investors await September jobs data that will be released later today.
Energy futures captured moderate gains overnight. Crude oil rose more than 1% to $89 per barrel. Diesel also trended 1% higher, with gasoline up around 0.75%. The U.S. Dollar softened slightly.
The latest 72-hour precipitation map from NOAA shows almost no rainfall will land on the Midwest and Plains between today and Monday, although parts of the Central Plains and eastern Corn Belt could gather small amounts during that time. Official 6-to-10-day forecasts show seasonally dry weather likely for the Northern Plains and upper Midwest between October 12 and October 16. Warmer-than-normal conditions are probable for most areas west of the Mississippi River.
On Thursday, commodity funds were net buyers of soyoil (+1,500) contracts but were net sellers of corn (-8,000), soybeans (-5,000), soymeal (-2,250) and CBOT wheat (-7,000).
Corn
Corn prices tested modest gains ahead of Friday’s session as traders continue to consider a slower-than-normal harvest pace and begin to look ahead to the next World Agricultural Supply and Demand Estimates (WASDE) report from USDA next week. Prices have stayed in a relatively narrow holding pattern for the past three weeks or so.
Corn basis bids were mostly steady across the central U.S. on Thursday but did see some movements in either direction yesterday, 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.
Ahead of the next WASDE report from USDA on October 12, analysts expect the agency to show 2022 corn production at 13.885 billion bushels, assuming average yields of 171.8 bushels per acre. That would be slightly below September’s tally of 13.944 billion bushels, if realized. Individual trade guesses ranged between 13.766 billion and 14.056 billion bushels.
Among those estimates, IHS Markit has lowered its forecast for 2022 corn production to 13.839 billion bushels, assuming an average yield of 171.2 bushels per acre.
Historically low water levels on the Mississippi River will also be worth watching in the coming days. A logjam comprised of more than 100 ships and barges is currently causing massive logistical problems, including reports of grounded vessels in Louisiana and near Memphis. Click here to learn more.
French farm office FranceAgriMer reports that 67% of the country’s corn harvest is now complete, up from 51% a week ago and well ahead of 2021’s pace of 6%. The 2022 harvest is trending 28 days ahead of last year’s pace and 18 days ahead of the prior five-year average after suffering severe drought and heat throughout the summer and early fall. Quality ratings were stable from last week, with 41% of the crop in good-to-excellent condition through October 3.
The preliminary report from the CBOT showed daily futures volume track moderately higher to 239,261, with open interest firming by 12,542. Options volume climbed to 70,403 and still favors calls (38,319) over puts (32,084). Implied volatility for near-the-money December contracts eased to 25.9%, which don’t expire for another 49 days.
Soybeans
Soybean prices mirrored corn action overnight, testing modest gains ahead of Friday’s session. Harvest pressure and worries over record-breaking production potential in Brazil should weigh on prices over the next several weeks, but prices have fallen enough to attract the occasional round of bargain buying.
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 last week. 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.
Prior to next Wednesday’s WASDE report from USDA, analysts think the agency will slightly raise its estimates for 2022 soybean production from 4.378 billion bushels in September to 4.381 billion bushels in its October report. That assumes stable average yields of 50.5 bushels per acre. Individual production trade guesses ranged between 4.309 billion to 4.463 billion bushels, and estimates for yield averages ranged between 49.8 bpa and 51.3 bpa.
South Korea purchased 60,000 metric tons of soymeal, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival around February 20.
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.
The preliminary report from CBOT showed daily futures volume shift modestly higher to 220,556 with open interest firming by 946. Options volume climbed to 44,189 and now favors puts (24,271) over calls (19,918). Implied volatility for near-the-money November contracts eased to 23.5% and expires in another 13 days.
Wheat
Wheat prices captured double-digit gains after a round of overnight bargain buying. Prices fell to a seasonal bottom in mid-August and have been slowly grinding higher since that time, with the occasional setback along the way.
Wheat export 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 agriculture ministry reported that the country has wrapped up its 2022 wheat harvest, with a total estimated production of 705.5 million bushels. That’s significantly lower than year-ago results of 1.183 billion bushels after the country struggled with the Russian invasion since late February. Ukraine’s corn harvest is just getting started, with progress of 2.3% so far.
The preliminary report from CBOT showed daily SRW volume firming to 79,038, with open interest also trending 3,069 higher. Options volume moved to 27,969 and favors calls (16,736) over puts (11,233). Implied volatility for December near-the-money options increased to 42.6% and expires in 49 days.
Volume in HRW wheat eased to 31,161, with open interest trending 619 higher. Options volume is at 2,596 and still favors calls (1,544) versus puts (1,052).
