Morning report: Corn, wheat struggle against rising Black Sea shipping volumes. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 3-5 cents
Soybeans down 8-16 cents; Soymeal down $2.90/ton; Soyoil down $0.23/lb
Chicago wheat down 7-8 cents; Kansas City wheat down 4-6 cents; Minneapolis wheat down 3-6 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!
My latest FFTF column is live on our site! Growers are progressing with soybean harvest much more quickly than their corn counterparts and many respondents are already feeling the pressure of dry soil on winter wheat sowing and crop development. Check out the article for all the latest farmer insights!
Corn
Most of the overnight market action was largely due to the soybean and wheat complexes, though corn followed closely behind. Corn prices drifted $0.03-$0.04/bushel lower overnight as the dollar charged higher and hopes for a continuance of the Black Sea grain deal remained intact as more grain cargoes continue to depart from Ukrainian ports.
Friday’s Cattle on Feed report from USDA did not have many surprises for the markets following its release. Cattle on feed inventory volumes had been expected to drift up to 1.8% lower in Friday’s report. USDA-NASS’s reported October 1 inventory reading of 11.449 million head represented a 0.9% decrease from year-ago volumes, which was perfectly aligned with the average trade guess leading up to the report’s release.
September 2022 placement volumes had been expected to take an uncharacteristic year-over-year decline in Friday’s data readings. September placement volumes typically increase as seasonal grilling demand slows and cattle feeders are able to restock feedlots in preparation for next summer’s beef uptick.
But placement volumes fell 3.8% from a year ago (and an unseasonal 1.7% from August 2022 placements) in Friday’s report, reflecting the dwindling volume of breeding stock remaining on the U.S. Plains after a year of drought has decimated pasture and feedstock (corn) conditions.
Livestock sales for slaughter in September 2022 rose 4% from a year ago to 1.86 million head. Marketings have remained at a high volume this year, even as the cattle herd is increasingly showing signs of contraction, reflecting the strong consumer demand for beef.
Cattle supplies – and more importantly, breeding stocks – continue to tighten as drought pressure on the Plains remains high. Strong domestic and international retail beef demand will not likely give the cattle herd much of a chance to restock in the coming months, which will likely keep supplies tight.
For feeders outside the Plains who have not struggled to acquire feedstuffs this year, this may be a non-issue. But for U.S. corn producers looking towards 2023 planting prospects, this should be a big red flag. Livestock (and residual) consumption is typically the largest end user of U.S. corn.
But as the herd shrinks, fewer cattle are eating corn bushels. Ethanol production volumes rebounded next week, but the ethanol production downturn of August and September – and I’ll go off about weak export volumes later this week – represented a big dent in the armor of corn demand.
Tight supplies have been a key driver of high corn prices the past two years. But as a tight supply environment becomes the new market equilibrium, diminished usage rates could represent a more significant threat to high prices than prior to August 2020.
Soybeans
Soybean prices fell $0.06-$0.14/bushel during the early morning trading session as a firm dollar and lackluster shipping paces in the U.S. Gulf continued to darken export prospects for U.S. soybeans.
However, Chinese customs data released overnight did report an uptick in China’s importing paces in September 2022, which bucked China’s recent trend of lighter soybean import volumes. China’s September 2022 soybean import volumes rose 12% on the year to 283.6 million bushels.
Soy crush margins in China reverted back to profitable levels during September 2022 as high hog prices and growing retail demand for pork helped to offset costly soybean prices.
“(Chinese) crush margins have been weak this year, which has limited imports, but crushers ultimately needed supplies and so there has been an uptick in imports and buying,” Darin Friedrichs at Sitonia Consulting, told Reuters.
“Feed demand should be stronger through the remainder of the year as hog margins are very good now.”
Wheat
Despite global production worries, a firmer dollar limited any hopes the U.S. wheat market may have had for overnight gains. Wheat prices dipped $0.03-$0.08/bushel this morning amid lackluster U.S. export hopes and continued progress in Black Sea shipments.
“The market seems to think that the corridor will be extended,” Commonwealth Bank of Australia’s Tobin Gorey told Reuters, after a cargo carrying 1.5 million bushels of wheat left the Ukrainian port of Chornomorsk for Yemen yesterday.
Drought in Argentina and excessive rains in Australia just ahead of peak harvest activity are casting doubt on global supply stability. “In Australia, rains are still persisting in the southeast of the country, raising serious concerns about the quality of the upcoming harvest,” Agritel analysts said in a note, as reported by Reuters.
Weather
A cold front will cool off the Plains today and will continue to move east into the Corn Belt by Wednesday, according to NOAA’s short-term forecasts. The system has already doused the Western Plains with rain (and snow in the mountains!!) over the weekend, and those showers are going to split into the far Northern and Southern Plains today.
This is great news for the Plains – the severely drought-stressed portions of the Southern Plains could see over two inches of precipitation over the next 24 hours, which would be very favorable for struggling winter wheat seedlings. Accumulation over the Northern Plains during that same time is likely to be light.
The showers will converge over the Mississippi River Valley later this evening and shift across the Corn Belt over the next few days, which could slow any remaining harvest progress in the region.
Any showers next week will likely dissipate by second half of the week, which should limit any potential harvest delays. NOAA’s 6-10-day forecasts are now trending warmer for the Upper Midwest and Eastern Corn Belt. Chances for rain are shifting into the Pacific Northwest, Eastern Corn Belt, and Southeast. Dry weather is likely to continue plaguing winter wheat conditions in the Southern Plains through the middle of next week.
The 8-10-day outlook is trending warmer and wetter for the Midwest and Plains, but the Southern Plains will continue to see slim chances for precipitation through the end of next week.
Financials
The S&P 500 edged 0.80% higher to $3,794.00 this morning as Wall Street kicked off the new trading week with a shot of optimism for today’s earnings reports, which will cover about a third of all companies comprising the S&P 500 index.
What else I’m reading this morning on our website, FarmFutures.com:
The 2022 grains price rally separates this year’s crop from the rally and crash of 2012 – Roger Wright explains why and how to capture value from current prices.
Naomi Blohm explains why corn is still king.
Bipartisan senators banded together to urge the EPA to expand RFS blending volumes.
AgMarket.Net’s Jim McCormick urges farmers to consider how global factors could influence markets into 2023 as harvest winds down.
For fun – here are some amazing harvest images our editorial staff has captured over the past couple months!
Morning Ag Commodity Prices – 10/24/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.825
6.78
6.8125
-0.03
-0.44%
MAR ’23 CORN
$ / BSH
6.8825
6.84
6.8725
-0.0325
-0.47%
MAY ’23 CORN
$ / BSH
6.89
6.8375
6.87
-0.0275
-0.40%
JUL ’23 CORN
$ / BSH
6.82
6.78
6.81
-0.025
-0.37%
SEP ’23 CORN
$ / BSH
6.37
6.325
6.34
-0.03
-0.47%
DEC ’23 CORN
$ / BSH
6.2375
6.2
6.22
-0.025
-0.40%
AR2 ’24 CORN
$ / BSH
6.275
6.2725
6.275
-0.0425
-0.67%
AY2 ’24 CORN
$ / BSH
6.315
#N/A
6.3375
0
0.00%
JUL ’24 CORN
$ / BSH
6.275
6.2675
6.2675
-0.035
-0.56%
NOV ’22 SOYBEANS
$ / BSH
13.93
13.785
13.83
-0.125
-0.90%
JAN ’23 SOYBEANS
$ / BSH
14.0275
13.8825
13.925
-0.12
-0.85%
MAR ’23 SOYBEANS
$ / BSH
14.1
13.955
14.0025
-0.115
-0.81%
MAY ’23 SOYBEANS
$ / BSH
14.165
14.04
14.08
-0.11
-0.78%
JUL ’23 SOYBEANS
$ / BSH
14.1925
14.0725
14.1175
-0.1075
-0.76%
AUG ’23 SOYBEANS
$ / BSH
14.025
13.93
13.97
-0.0925
-0.66%
SEP ’23 SOYBEANS
$ / BSH
13.655
13.6325
13.6325
-0.1025
-0.75%
NOV ’23 SOYBEANS
$ / BSH
13.5825
13.49
13.5475
-0.0625
-0.46%
AN2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.645
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.595
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.5375
#N/A
13.58
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
72
70.52
71.43
-0.07
-0.10%
JAN ’23 SOYBEAN OIL
$ / LB
69.38
68.08
68.8
-0.17
-0.25%
DEC ’22 SOY MEAL
$ / TON
418.4
413.5
415.4
-2.5
-0.60%
JAN ’23 SOY MEAL
$ / TON
410.4
405.9
407.9
-2.4
-0.58%
MAR ’23 SOY MEAL
$ / TON
401.6
397.2
399.1
-2.5
-0.62%
MAY ’23 SOY MEAL
$ / TON
397.6
394
395.8
-2.1
-0.53%
JUL ’23 SOY MEAL
$ / TON
397.2
393.3
395.9
-1.7
-0.43%
DEC ’22 Chicago SRW
$ / BSH
8.565
8.3975
8.465
-0.0425
-0.50%
MAR ’23 Chicago SRW
$ / BSH
8.7575
8.595
8.655
-0.04
-0.46%
MAY ’23 Chicago SRW
$ / BSH
8.8525
8.7
8.7525
-0.0425
-0.48%
JUL ’23 Chicago SRW
$ / BSH
8.8275
8.6825
8.7375
-0.0425
-0.48%
SEP ’23 Chicago SRW
$ / BSH
8.835
8.725
8.7475
-0.065
-0.74%
DEC ’23 Chicago SRW
$ / BSH
8.895
8.79
8.8125
-0.0675
-0.76%
AR2 ’24 Chicago SRW
$ / BSH
8.9175
8.835
8.835
-0.045
-0.51%
DEC ’22 Kansas City HRW
$ / BSH
9.5325
9.3925
9.46
-0.0225
-0.24%
MAR ’23 Kansas City HRW
$ / BSH
9.5175
9.38
9.4425
-0.0225
-0.24%
MAY ’23 Kansas City HRW
$ / BSH
9.4975
9.365
9.435
-0.01
-0.11%
JUL ’23 Kansas City HRW
$ / BSH
9.4475
9.3575
9.3875
-0.01
-0.11%
SEP ’23 Kansas City HRW
$ / BSH
9.42
9.3225
9.3225
-0.07
-0.75%
DEC ’23 Kansas City HRW
$ / BSH
9.45
9.36
9.3675
-0.065
-0.69%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.38
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.655
9.54
9.57
-0.045
-0.47%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.7025
9.63
9.6375
-0.0425
-0.44%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.6825
9.6825
9.6825
-0.0575
-0.59%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.775
9.775
9.775
0.02
0.21%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.475
#N/A
9.455
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.44
#N/A
9.4425
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.265
0
0.00%
DEC ’21 ICE Dollar Index
$
112.465
111.335
112.305
0.325
0.29%
DE ’21 Light Crude
$ / BBL
85.85
82.63
84.03
-1.02
-1.20%
JA ’21 Light Crude
$ / BBL
84.73
81.61
82.99
-0.96
-1.14%
NOV ’22 ULS Diesel
$ /U GAL
3.8718
3.8
3.827
-0.0053
-0.14%
DEC ’22 ULS Diesel
$ /U GAL
3.5927
3.5222
3.5496
-0.0036
-0.10%
NOV ’22 Gasoline
$ /U GAL
2.66
2.58
2.6223
-0.0397
-1.49%
DEC ’22 Gasoline
$ /U GAL
2.478
2.3964
2.4384
-0.0364
-1.47%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
175.275
0
0.00%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
178.35
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
150.475
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
152.425
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
89.125
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
90.525
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.84
21.84
21.84
0.02
0.09%
NOV ’22 Class III Milk
$ / CWT
21.14
21
21.01
-0.13
-0.61%
DEC ’22 Class III Milk
$ / CWT
19.45
19.42
19.42
-0.09
-0.46%
What else I’m reading this morning on our website, FarmFutures.com:Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
