Morning report: Wheat edges lower on Black Sea exports, but losses capped by U.S. drought. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 3-4 cents
Soybeans down 2-6 cents; Soymeal down $3.90/ton; Soyoil up $1.01/lb
Chicago wheat up 6-8 cents; Kansas City wheat up 5-6 cents; Minneapolis wheat up 2-5 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates! How is harvest progressing on your farm this fall?! Click this link to take the survey and share updates about your farm’s harvest progress. 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!
Stay tuned to our website today for my latest Feedback from the Field column featuring all the latest harvest insights!
Corn
Corn prices fell $0.03-$0.04/bushel this morning, marking the third consecutive day of losses for the corn complex due to quickening harvest speeds in the U.S. and optimism for continued Ukrainian export paces. Slow export paces are also adding bearish pressure to the U.S. grain and oilseed complex overnight.
“U.S. harvest is running at a strong pace and it is replenishing supplies,” a Singapore-based grains trader told Reuters. “But there are concerns about the slow pace of U.S. exports.”
Yesterday’s Crop Progress report from USDA saw corn harvest progress make its biggest gains of the season so far, rising 14% from the previous week to 45% complete as of October 16. This week’s progress rose 5% ahead of the five-year average for the same reporting period, suggesting that even with some scattered showers across the Heartland last week, farmers are increasingly shifting focus from soybean harvest to advance the 2022 corn crop.
However, for a third consecutive week, corn harvest progress came in below market expectations. Pre-report trade estimates had been anticipating a 46% completion rate in yesterday’s report, which helped limit losses in the corn market during the overnight trading session.
Conditions fell 1% from the previous week, with 53% of the crop in good to excellent condition as of Sunday. The trade had been expecting to see USDA rate 54% of the crop as good to excellent, so it was yet another bullish factor that helped limit price losses for corn futures this morning.
Soybeans
Soybean prices slipped $0.02-$0.06/bushel lower this morning amid harvest pressures and lackluster export paces amid slow Mississippi River traffic this fall during peak soybean export season.
Plus – U.S. shipping woes are creating record-high soybean prices in China.
Soybean harvest continues to advance much more quickly than its corn counterpart this fall, though with over half of the crop combined, it will likely see diminishing harvest speeds going forward as growers turn their focus to corn harvest.
Through the week ending October 16, 63% of the 2022 U.S. soybean crop had been harvested, up 19% from the previous week and 9% ahead of the five-year average. Markets had been expecting USDA to report that only 60% of the crop was harvested, adding to the bearish forces at play in the soybean market overnight.
Crop conditions held steady at 57% good to excellent for a second straight week in yesterday’s Crop Progress report. Market watchers had been expecting USDA to rate exactly that amount in good to excellent condition ahead of the report’s release, adding slightly more bearish sentiment to the soybean complex.
The National Oilseed Processors Association (NOPA) released its monthly estimates for September 2022 yesterday. The monthly crush volume came in at 158.1 million bushels, only 3% higher than year ago levels.
However, it was also the smallest monthly soy crush volume recorded since September 2021 as well. This is not unusual – September 2021 soybean crushing volumes were the smallest monthly volumes reported during the 2021/22 marketing year.
Many plants took scheduled downtime for seasonal maintenance and repairs during September. More specifically, the biggest declines were reported at plants in Illinois, Iowa (the top two soybean-producing states in the country), and the South. September is also the time of year where old crop supplies are at their lowest and new crop supplies are only slowly beginning to trickle out of the countryside into end users’ possession.
The trade is had expected a range of 152 million – 170.4 million bushels with an average guess of 161.6 million bushels of soybeans processed in September 2022 leading up to the report’s release. The wide variance in the estimates reflected the uncertainty by the trade in the lead-up to the NOPA data update.
NOPA reporting is significant because NOPA crush plants handle approximately 95% of all U.S. soybeans destined for crush facilities. The findings of yesterday’s report were largely neutral (maybe slightly bullish if you need some optimism this morning) with regards to prices. Expect NOPA reports in upcoming months to generate more market momentum.
Wheat
Wheat prices fell $0.02-$0.06/bushel overnight on continued access to Black Sea grain supplies, despite earlier criticisms from Moscow about the deal’s viability. A stronger dollar also limited any further price gains in the U.S. wheat complex this morning.
Losses were capped by dry conditions across the U.S. Plains, which is increasingly stunting crop development for freshly planted 2023 wheat seedlings. Planting remains behind schedule in Kansas and Oklahoma due to the dry soil conditions, which could increase risk of frost exposure and damage to crops further down the road this winter.
The U.N. agreed yesterday to continue negotiations to keep – and possibly expand – the Black Sea Grains Initiative in place. The Initiative has provided safe passageway for Ukrainian grain cargoes amid the ongoing Russian military invasion.
Russia showed willingness to cooperate with U.N. officials during yesterday’s sessions, paving the way for losses in the wheat and corn markets overnight.
“Discussions will continue. Fertilizers and raw materials required to produce fertilizers – that includes ammonia – originating from the Russian Federation are key to worldwide agricultural production,” U.N. spokesman Stephane Dujarric said yesterday. “We are concerned about the next harvest and crisis in the making if fertilizers are not made available quickly and at a reasonable price to farmers all over the world as the sowing seasons begins.”
Winter wheat sowing was reported by USDA as 69% complete through Sunday, up 14% from the previous week and 1% ahead of pre-report trade expectations. Dry weather in the Plains and Pacific Northwest has helped to boost planting speeds.
However, excessively dry soils in Oklahoma and Kansas are still leading farmers to wait for better moisture prospects to plant. For soft red winter wheat acres in the Midwest, planting remains delayed as a later than usual harvest season for corn and soybeans prevents some winter wheat acres from being planted at this time.
Emergence rates reflect these issues. USDA reported 38% of anticipated 2023 winter wheat to be emerged as of Sunday. While that marked a 12%-increase from the prior week, that total remains 6% lower than the five-year average for the same reporting period due to the lackluster growing conditions in which many winter wheat crops were planted into this fall.
Inputs
Yesterday, the U.S. International Trade Commission announced that the sodium nitrate industry is “materially injured or threatened with material injury by reason of imports of sodium nitrite from Russia that the U.S. Department of Commerce (Commerce) has determined are sold in the United States at less than fair value.”
Translation: The U.S. Commerce Department believes Russia to be dumping sodium nitrate in excess on the global market at artificially lower prices than what are believed to be competitive in the U.S. As a result, it is expected that the Commerce Department will issue duties (taxes) on Russian sodium nitrate imports into the U.S.
There are only two U.S. producers of sodium nitrate, which is used as a food preservation ingredient in cured meats and as a water-soluble fertilizer for quick-release nitrogen applications. The U.S. only imported $6.7 million worth of sodium nitrate from Russia in 2021
A formal report will be issued November 14, 2022. The USITC is expected to formally notify the Commerce Department of antidumping policies on October 27.
Weather
Fall weather will dominate most of the forecasts across the U.S. Heartland again today, according to NOAA’s short-term forecasts. Clear skies are forecast for most of the Midwest for the next 24 hours, except in the Great Lakes region, where up to an inch of rain could fall during that time, delaying harvest progress.
The end of October is now showing better chances for precipitation for the Heartland. NOAA’s 6-10-day outlook is showing warmer temperature probabilities for the Plains, Midwest, Southeast, and East Coast through month end. The forecasts also feature an above average probability for rainfall for the Western half of the U.S. as well as up to Lake Michigan, which would greatly benefit newly planted winter wheat crops across the Heartland.
However, the 8-14-day outlook is trending even wetter for the Heartland through the end of October. The extended forecast also indicates warmer than average temperature patterns, though not as likely as in the 6-10-day forecast.
This means that the optimal window for harvest progress may be closing soon for farmers over the next week.
Bonus
The U.S. is approaching record numbers of culled chickens and turkeys following H5N1 avian influenza outbreaks this year – a staggering 47 million. This year’s virus variant is more easily transmissible among wild flocks, which subsequently increases its transmissibility to commercial flocks.
During the last – and most devastating – avian influenza outbreak in 2015, 50.5 million birds died. Fall is the time of year at which chicken farms begin expanding egg hatching volumes in preparation for New Year’s diets, which typically increase consumer demand for chicken.
That is especially important for soybean producers this year because poultry flocks consume 55% of U.S. soymeal supplies. And with export markets in jeopardy amid low water volumes on the Mississippi River, U.S. growers harvesting soybeans this fall will be increasingly reliant on domestic consumption to provide profitable cash offerings this fall.
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr explains how small supplies and demand dynamics could influence grain market prices in the coming weeks.
In the latest Around Farm Progress podcast, our team looks at why the low water levels on the Mississippi River are causing trouble for farmers.
Naomi Blohm dissects eight geopolitical events that could move grain markets in the coming weeks.
University of Minnesota ag economist Ed Usset introduces readers to marketing strategies that use call options to capitalize on re-owning crops.
Executive editor Mike Wilson explains how to manage costly nitrogen for high-yielding corn.
Morning Ag Commodity Prices – 10/18/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.8375
6.775
6.775
-0.06
-0.88%
MAR ’23 CORN
$ / BSH
6.9
6.84
6.84
-0.0575
-0.83%
MAY ’23 CORN
$ / BSH
6.91
6.8525
6.8525
-0.0575
-0.83%
JUL ’23 CORN
$ / BSH
6.8525
6.7975
6.8
-0.0525
-0.77%
SEP ’23 CORN
$ / BSH
6.3825
6.3325
6.3325
-0.0475
-0.74%
DEC ’23 CORN
$ / BSH
6.245
6.1975
6.1975
-0.0475
-0.76%
AR2 ’24 CORN
$ / BSH
6.3025
6.2725
6.2725
-0.04
-0.63%
AY2 ’24 CORN
$ / BSH
6.3225
6.3
6.3
-0.03
-0.47%
JUL ’24 CORN
$ / BSH
6.2825
6.2675
6.2675
-0.025
-0.40%
NOV ’22 SOYBEANS
$ / BSH
13.8425
13.77
13.7975
-0.055
-0.40%
JAN ’23 SOYBEANS
$ / BSH
13.9225
13.8475
13.8725
-0.055
-0.39%
MAR ’23 SOYBEANS
$ / BSH
13.9925
13.9225
13.9475
-0.0525
-0.38%
MAY ’23 SOYBEANS
$ / BSH
14.065
14
14.035
-0.035
-0.25%
JUL ’23 SOYBEANS
$ / BSH
14.0925
14.0325
14.055
-0.045
-0.32%
AUG ’23 SOYBEANS
$ / BSH
13.9375
13.89
13.8975
-0.0575
-0.41%
SEP ’23 SOYBEANS
$ / BSH
13.605
13.565
13.59
-0.035
-0.26%
NOV ’23 SOYBEANS
$ / BSH
13.49
13.4275
13.455
-0.035
-0.26%
AN2 ’24 SOYBEANS
$ / BSH
13.495
#N/A
13.5275
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.48
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.42
#N/A
13.4675
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
67.9
66.57
67.73
0.89
1.33%
JAN ’23 SOYBEAN OIL
$ / LB
65.72
64.6
65.55
0.64
0.99%
DEC ’22 SOY MEAL
$ / TON
410.9
406.6
406.7
-4.3
-1.05%
JAN ’23 SOY MEAL
$ / TON
405.9
402
402
-3.8
-0.94%
MAR ’23 SOY MEAL
$ / TON
398.9
395.6
395.6
-3
-0.75%
MAY ’23 SOY MEAL
$ / TON
395.2
392.3
392.5
-2.3
-0.58%
JUL ’23 SOY MEAL
$ / TON
395
392.4
392.7
-1.8
-0.46%
DEC ’22 Chicago SRW
$ / BSH
8.66
8.505
8.5175
-0.0925
-1.07%
MAR ’23 Chicago SRW
$ / BSH
8.8375
8.69
8.705
-0.0825
-0.94%
MAY ’23 Chicago SRW
$ / BSH
8.92
8.785
8.8
-0.075
-0.85%
JUL ’23 Chicago SRW
$ / BSH
8.8725
8.76
8.7925
-0.0425
-0.48%
SEP ’23 Chicago SRW
$ / BSH
8.8375
8.7625
8.7875
-0.0475
-0.54%
DEC ’23 Chicago SRW
$ / BSH
8.835
8.7925
8.825
-0.0475
-0.54%
AR2 ’24 Chicago SRW
$ / BSH
8.7775
8.7775
8.7775
-0.065
-0.74%
DEC ’22 Kansas City HRW
$ / BSH
9.575
9.435
9.4425
-0.0775
-0.81%
MAR ’23 Kansas City HRW
$ / BSH
9.56
9.4275
9.4325
-0.075
-0.79%
MAY ’23 Kansas City HRW
$ / BSH
9.53
9.4175
9.42
-0.0725
-0.76%
JUL ’23 Kansas City HRW
$ / BSH
9.44
9.3425
9.35
-0.0675
-0.72%
SEP ’23 Kansas City HRW
$ / BSH
9.355
9.3325
9.3325
-0.05
-0.53%
DEC ’23 Kansas City HRW
$ / BSH
9.3525
9.345
9.3525
-0.0425
-0.45%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.325
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.57
9.5
9.52
-0.0325
-0.34%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.6575
9.5925
9.595
-0.035
-0.36%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.7
9.645
9.645
-0.045
-0.46%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.685
#N/A
9.6825
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.32
9.32
9.32
-0.0375
-0.40%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.295
#N/A
9.34
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.105
0
0.00%
DEC ’21 ICE Dollar Index
$
112.35
111.63
112.12
0.212
0.19%
NO ’21 Light Crude
$ / BBL
86.51
84.56
85.49
0.03
0.04%
DE ’21 Light Crude
$ / BBL
85.53
83.6
84.56
0.03
0.04%
NOV ’22 ULS Diesel
$ /U GAL
4.1295
4.0713
4.1187
0.0335
0.82%
DEC ’22 ULS Diesel
$ /U GAL
3.7323
3.6822
3.7132
0.0259
0.70%
NOV ’22 Gasoline
$ /U GAL
2.6239
2.5628
2.5798
-0.0133
-0.51%
DEC ’22 Gasoline
$ /U GAL
2.4636
2.4078
2.4338
-0.0006
-0.02%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
174.75
0
0.00%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
176.4
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
147.875
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
149.2
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
84.95
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
85.975
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.73
#N/A
21.76
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.57
20.57
20.57
0.01
0.05%
DEC ’22 Class III Milk
$ / CWT
19.91
#N/A
19.85
0
0.00%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
