Afternoon report: Wheat prices also in the green on some late-session technical buying
Grain prices finished the week on a high note, with corn, soybeans and wheat all making moderate inroads in Friday’s session following a round of technical buying today. Spring wheat and corn contracts showed the most upside, rising more than 1.25% and 1% higher, respectively. Most soybean and wheat contracts firmed between 0.5% and 0.75%.
Almost no rain is expected to fall on the Midwest or Plains between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA? Will dry conditions hold into next week? NOAA’s 8-to-14-day outlook predicts drier-than-normal conditions will persist across the central U.S. between October 14 and October 20, while seasonally cool temperatures could take hold in the eastern half of the country during this time.
On Wall St., the Dow took a 668-point tumble to 29,258 on a somewhat complicated matter. Unemployment fell to 3.5%, which is generally a good thing – however, it also makes it more likely for the Federal Reserve to continue its pattern of aggressive interest rate hikes in the wake of high inflation.
Energy futures moved significantly higher amid expected production cuts by OPEC+. Crude oil climbed nearly 5% higher to $92 per barrel this afternoon. Diesel was up more than 4%, with gasoline trending 2% higher. The U.S. Dollar firmed moderately.
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 benefited from a round of technical buying that lifted prices more than 1% higher on Friday. December futures trended 7.5 cents higher to $6.83, with March futures up 7.25 cents to $6.9050.
Ahead of the next WASDE report from USDA, out 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.
Historically low water levels on the Mississippi River will also be worth watching in the near future. A logjam comprised of more than 100 ships and barges is already causing massive logistical problems, and there are multiple reports of grounded vessels in northern 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 steady from a week ago, with 41% of the crop in good-to-excellent condition through October 3.
Preliminary volume estimates were for 187,998 contracts, moving moderately below Thursday’s final count of 221,083.
Soybeans
Soybean prices tacked on moderate gains during Friday’s session because of attracting some bargain buyers after sliding to the lowest level since late July on Thursday. Spillover strength from other commodities generated additional tailwinds today. November futures added 7.75 cents to $13.6575, with January futures up 6.5 cents to $13.77.
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.
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 unchanged average yields from last month’s estimates 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.
Weather patterns in Brazil and Argentina will be critical over the coming weeks for the top U.S. soybean competitors. While some areas have received a healthy soaking of rainfall this week, other areas have remained dry and may continue to see drought conditions as long as La Ni?a conditions remain in place. Matthew Kruse, president of Commstock Investments, offers further analysis in today’s Ag Marketing IQ blog – click here to learn more.
Meantime, a reader asks grain market analyst Roger Wright: “Roger, I have about one-third of my soybeans unpriced. Am I better off to sell at this lower price and buy them back using call options, or pay the 5 cents a month storage at the elevator? Grain bin storage is not an option.” Wright offers his opinion on what to do and how to approach these type of “opportunity cost” situations – click here to learn more.
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.
Preliminary volume estimates were for 250,594 contracts, moving moderately above Thursday’s final count of 205,039.
Wheat
Wheat prices followed a broad set of other commodities higher on Friday, shifting 0.5% to 1.25% on the ensuing round of technical buying. Traders remain leery of a very strong U.S. Dollar, however, which could hinder some future sales. December Chicago SRW futures picked up 4.25 cents to $8.8325, December Kansas City HRW futures added 7 cents to $9.72, and December MGEX spring wheat futures gained 12.5 cents to $9.75.
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 as the country continues to struggle with the Russian invasion since late February. Ukraine’s corn harvest is just getting started, with progress of 2.3% so far.
Algeria is thought to have purchased as much as 9.2 million bushels from optional origins in a tender that closed earlier today. At least some of the total is expected to be sourced from Canada, although additional details were not immediately available. The grain is for shipment in October and November.
Preliminary volume estimates were for 65,652 CBOT contracts, sliding slightly below Thursday’s final count of 74,635.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
cents/bu
22-Dec
684.5
671.5
683.25
7.5
23-Mar
691.75
679
691
7.25
Soybeans
22-Nov
1373.5
1350.75
1367
7.75
23-Jan
1385.25
1364.25
1379.25
6.5
Soymeal $/ton
22-Dec
401.7
391.9
400.7
7.1
Soyoil cents/lb
22-Dec
66.8
65.37
66.6
0.62
Wheat $/bushel
22-Dec
896.75
872.5
880.25
4.25
23-Mar
910.5
887.25
895
5.5
KC Wheat
22-Dec
985
963.5
968.75
7
23-Mar
982
961.25
966.25
7.5
MPLS Wheat
22-Dec
982
963.25
968
12.5
23-Mar
989.25
970.5
975.75
13
Live Cattle cents/lb
22-Oct
145.55
145.125
145.175
-0.15
Feeder Cattle cents/lb
22-Oct
176.75
175.35
175.4
-1.025
Lean Hogs cents/lb
22-Dec
78.35
76.575
77.075
-0.7
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Nov
93.26
88
93.05
4.6
Diesel
22-Oct
4.0474
3.8399
4.0211
0.1562
Unleaded Gasoline $/gallon
22-Oct
2.7675
2.6645
2.7472
0.0658
Natural Gas
22-Nov
7.226
6.988
7.027
-0.215
U.S. Dollar Index
22-Dec
112.745
111.865
112.66
0.477
Gold $/ounce
22-Nov
1714.6
1694.3
1696.4
-15.3
Copper
22-Oct
3.455
3.4115
3.4205
-0.0545
Fertilizer Swaps
(as of 10/07)
DAP Tampa-index
712.5
-12.5
DAP-New Orleans
815.7
-16.53
Urea-New Orleans
675.2
-5.51
Urea-Middle East
730.0
-37.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
617.3
38.58
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