Soybeans vault past $15.
Corn and wheat also move higher in Tuesday’s session
More and more experts predict this season’s Brazilian soybean crop will fail to reach 5 billion bushels, giving traders incentive to remain in a pattern of technical buying on Tuesday. Consequently, soybean prices jumped more than 2.5% higher by the close. Corn prices followed suit, tracking more than 1.25% higher, and most wheat contracts firmed 1%.
Plenty of rain and snow will be arriving later this week, delivering significant amounts of moisture in a band stretching from eastern Texas all the way through the Northeast between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally dry conditions for a large portion of the Corn Belt between February 8 and February 14, with warmer-than-normal temperatures likely for the Northern Plains.
On Wall St., the Dow tracked 70 points higher in afternoon trading to 35,202, anchored by strong performances in the banking sector. Energy futures were mixed but mostly higher. Crude oil was down fractionally this afternoon, staying just above $88 per barrel. Diesel rose 1%, with gasoline up around 0.75%. Volatile natural gas prices tumbled 4% lower. The U.S. Dollar softened slightly.
On Monday, commodity funds were net buyers of soybeans (+12,000) and soymeal (+4,500) contracts but were net sellers of corn (-8,000), soyoil (-2,000) and CBOT wheat (-16,500).
Corn
Corn prices firmed more than 1.25% higher today on a round of technical buying largely spurred by spillover strength from soybeans. A large sale to Mexico announced this morning lent additional support. March futures rose 8.5 cents to $6.3450, with May futures up 9 cents to $6.3350.
Corn basis bids were steady to mixed on Tuesday, moving as much as 9 cents higher at an Illinois river terminal and spilling as much as 4 cents lower at an Iowa processor today.
Private exporters announced to USDA the sale of 4.3 million bushels of corn for delivery to Mexico during the 2021/22 marketing year, which began September 1.
Brazilian corn exports reached 111.1 million bushels in January, which was a year-over-year increase of 20.3%, according to the latest available governmental data.
Turkey issued an international tender to purchase 12.8 million bushels of animal feed corn from optional origins that closes February 8. The grain is for shipment between February 25 and March 15. Turkey has been an active grain buyer this winter after suffering through a drought-stressed season.
The latest data from the European Commission shows that EU corn imports during the 2021/22 marketing year have reached 371.6 million bushels through January 30. That’s a year-over-year reduction of 5.8% so far.
The latest readings from the Ag Economy Barometer via Purdue University / CME Group have fallen to the lowest levels since July 2020 but still remain at a net positive of 119. “Rising farm input costs and ongoing supply chain disruptions appear to be contributing to producers’ weaker perception of current conditions and expectations of their farm’s financial performance in 2022 when compared to last year,” according to Purdue’s James Mintert. Of particular note – 37% of respondents indicated they will reduce nitrogen application rates versus a year ago.
Preliminary volume estimates were for 307,131 contracts, moving moderately below Monday’s final count of 447,850.
Soybeans
Soybean prices jumped more than 2.5% higher today after more and more estimates for Brazilian soybean production are coming in below 5 billion bushels. That triggered another round of technical buying that lifted prices more than 2.5% higher by the close, surpassing $15 per bushel for the first time since last June. March futures climbed 39 cents to $15.2950, with May futures up 40 cents to $15.3525.
Soybean basis bids were steady to mixed on Tuesday after plummeting 35 cents lower at an Iowa processor while firming 7 to 8 cents at two interior river terminals today.
Private exporters announced to USDA the sale of 4.9 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which begins September 1.
European Union soybean imports during the 2021/22 marketing year have fallen moderately below last year’s pace, with 285.9 million bushels through January 30. EU soymeal imports are also down moderately from a year ago, with 9.56 million metric tons.
Brazilian soybean exports reached 90.8 million bushels in January, which was exponentially higher than year-ago results of just 1.8 million bushels, according to governmental data released earlier today.
It will be an interesting week to see what factors garner the most attention from traders, notes grain market analyst Bryce Knorr. “With news out of China likely sparse this week as the country celebrates Lunar New Year holidays and the opening of winter Olympics, all eyes will be on South American weather,” he says. Knorr does plenty of trendspotting in today’s Ag Marketing IQ blog – click here to learn more.
What are some savvy ways to identify new opportunities in 2022? What potential investments are worth pursuing, and when is it smarter to walk away? Darren Frye, CEO of Water Street Solutions, offers some salient advice in his latest Finance First blog – click here to learn more.
Preliminary volume estimates were for 294,914 contracts, tracking moderately above Monday’s final count of 201,237.
Wheat
Wheat prices trended 0.6% to 1% higher on a round of technical selling largely spurred by spillover strength from corn and soybeans, although lingering concerns over Russia/Ukraine tensions lent additional support. March Chicago SRW futures gained 8.25 cents to $7.6950, March Kansas City HRW futures added 5.25 cents to $7.8650, and March MGEX spring wheat futures rose 9.75 cents to $9.1625.
European Union soft wheat exports during the 2021/22 marketing year reached 611.4 million bushels through January 30. That’s a year-over-year increase of 6.3% versus a year ago. EU barley exports are also trending above last year’s pace, with 232.9 million bushels.
Tunisia issued an international tender to purchase 3.7 million bushels of soft wheat, 2.8 million bushels of durum wheat and 3.4 million bushels of animal feed barley from optional origins that closes tomorrow. The grain is for shipment starting in late April.
Japan issued a regular tender to purchase 2.0 million bushels of food-quality wheat from Canada and Australia that closes on Thursday. The grain from Canada is for shipment starting in late March, and the grain from Australia is for shipment in June.
Preliminary volume estimates were for 75,731 CBOT contracts, sliding moderately below Monday’s final count of 105,840.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
639.5
624.5
634.75
8.5
22-May
637.75
623.25
633.75
9
Soybeans
22-Mar
1539
1485
1528.5
39
22-May
1543.25
1490
1534.25
40
Soymeal $/ton
22-May
434.7
415.4
433.5
16.6
Soyoil cents/lb
22-May
66.16
64.12
65.75
0.99
Wheat $/bushel
22-Mar
776.75
760.5
769
8.25
22-May
781
765.5
774
8
KC Wheat
22-Mar
793.5
776.25
786.25
5.25
22-May
796.25
779.5
789.25
4.75
MPLS Wheat
22-Mar
923
906
915
9.75
22-May
920
902.75
911.5
9.75
Live Cattle cents/lb
22-Feb
140.925
139.575
140.375
0.8
Feeder Cattle cents/lb
22-Apr
169.425
167.5
169.425
0.975
Lean Hogs cents/lb
22-Apr
99.15
94.625
98.075
2.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
88.87
86.55
87.89
-0.26
Diesel
22-Mar
2.75
2.6626
2.7335
0.0178
Unleaded Gasoline $/gallon
22-Mar
2.5834
2.5112
2.5681
0.0137
Natural Gas
22-Apr
4.736
4.474
4.635
-0.04
U.S. Dollar Index
22-Mar
96.715
96.215
96.345
-0.192
Gold $/ounce
22-Mar
1808.7
1796
1800
5
Copper
22-Feb
4.4315
4.3545
4.4315
0.1135
Fertilizer Swaps
(as of 01/28)
DAP Tampa-index
810.0
0
DAP-New Orleans
738.6
-28
Urea-New Orleans
598.0
-41
Urea-Middle East
655.0
-68
Urea-Black Sea
667.5
-38
UAN (32%) New Orleans
606.3
0
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