Soybeans soar early, stumble late.
Corn and wheat prices also spilled into the red in Thursday’s session
Corn and soybean prices tried to extend the latest rally, trending moderately higher this morning, but were unable to hold onto those gains by the close after new inflation data shocked a broad range of commodities lower. Soybeans were briefly trading over $16 per bushel but ultimately fell 1.25% lower today. Corn prices faded around 0.75% lower. Most wheat contracts finished the session down 1.5% to 2%.
The latest updates to the U.S. Drought Monitor showed 91.4% of the High Plains is experiencing overly dry conditions through February 8, up from 91.0% a week earlier. In the Midwest, drought’s footprint is covering 45.1% of the region, up from 43.2% a week ago. Meantime, NOAA’s 8-to-14-day outlook predicts seasonally wet weather is likely for the eastern half of the country between February 17 and February 23, with warmer-than-normal conditions likely for most of the U.S. during that time.
On Wall St., the Dow dropped 466 points to 35,301 as investors returned to an attitude of fear over rising inflation and the prospect that the Federal Reserve will ramp up interest rates quickly this year. The latest consumer price index data showed a larger-than-expected yearly increase of 7.5% – the largest such jump since 1982. Energy futures were lightly mixed. Crude oil was near-even in afternoon trading, staying just under $89 per barrel. Diesel was also steady, while gasoline trended 0.4% higher. The U.S. Dollar softened slightly.
On Wednesday, commodity funds were net buyers of all major grain contracts, including corn (+15,000), soybeans (+12,000), soymeal (+3,500), soyoil (+3,500) and CBOT wheat (+4,000).
Corn
Corn prices tested moderate gains in overnight trading and throughout the morning before spilling back into the red by the close, finishing Thursday’s session with losses of around 0.75%. Spillover weakness from a broad range of other commodities was apparent. March and May futures each dropped 5 cents to close at $6.4175 and $6.41, respectively.
Corn basis bids were mostly steady to weak on Thursday after dropping 2 to 6 cents lower across five Midwestern locations. An Illinois river terminal bucked the overall trend after firming a penny higher today.
Corn export sales reached 23.2 million bushels, which was a 50% drop from the prior week and 43% below the prior four-week average. That was also on the low end of trade estimates, which ranged between 19.7 million and 39.4 million bushels. Cumulative totals for the 2021/22 marketing year remain slightly behind last year’s pace, with 815.5 million bushels.
Corn export shipments fared better but still slid 6% below the prior four-week average, to 45.2 million bushels. Japan was the No. 1 destination, with 13.0 million bushels.
South Africa’s Crop Estimates Committee released new data earlier today that suggests the country’s 2021 corn harvest reached 642.3 million bushels, which is a year-over-year increase of 6.6% for the continent’s largest corn producer. South Africa also produced a modest amount of soybeans last year, at 69.7 million bushels.
Taiwan purchased 2.6 million bushels of animal feed corn, likely sourced from Argentina, in an international tender that closed today – besting six offers for U.S. corn. The grain is for shipment in April.
Preliminary volume estimates were for 702,438 contracts, moving moderately above Wednesday’s final count of 633,726.
Soybeans
Soybean prices trended higher in morning trading but ultimately followed other grains lower after bearish inflation data triggered a broad selloff, even though supply and demand fundamentals remain strong. March futures dropped 21.75 cents to $15.73, with May futures down 20 cents to $15.7550.
Soybean basis bids were mostly steady but did trend 5 cents higher at an Illinois river terminal while sliding 2 cents lower at two other Midwestern locations on Thursday.
Private exporters announced to USDA the sale of 11.0 million bushels of soybeans to unknown destinations. Of the total, 78% is for delivery during the current marketing year, which began September 1, and the remainder is for delivery in 2022/23.
Soybean exports captured 58.7 million bushels in old crop sales, plus another 32.9 million bushels in new crop sales for a grand total of 91.6 million bushels. That was above the entire range of trade guesses, which came in between 42.3 million and 84.5 million bushels. Cumulative totals for the 2021/22 marketing year increased to 1.384 billion bushels but still trail last year’s pace by more than 433 million bushels.
Soybean export shipments slipped 9% below the prior four-week average to 47.8 million bushels. China again accounted for more than half of the total, with 26.7 million bushels.
Brazil’s Conab has again lowered its estimates for the country’s 2021/22 soybean production, which is now projected at 4.611 billion bushels – one of the lowest estimates released by any entity so far.
In Argentina, the Rosario grains exchange worries that current weather patterns will produce a repeat of a “productive disaster” last seen in 2018, when total production fell below 1.4 billion bushels. The group currently forecasts 2021/22 production at 1.488 billion bushels.
Preliminary volume estimates were for 497,203 contracts, jumping 35% above Wednesday’s final count of 367,057.
Wheat
Wheat prices suffered a moderate setback Thursday after a bearish set of export data, coupled with spillover weakness from corn and soybeans, triggered a round of technical selling that left most contracts down more than 1.5% today. March Chicago SRW futures dropped 13.75 cents to $7.7125, March Kansas City HRW futures lost 16 cents to $7.99, and March MGEX spring wheat futures fell 13 cents to $9.4075.
Old crop wheat sales fell 75% below the prior four-week average to 3.1 million bushels. New crop sales chipped in another 1.8 million bushels, for a total of 4.9 million bushels. That was on the very low end of trade estimates that ranged between 4.6 million and 25.7 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace, with 471.2 million bushels.
Wheat export shipments improved 9% from the prior four-week average to 14.0 million bushels. South Korea was the No. 1 destination, with 3.6 million bushels.
How good are wheat price prospects this year? Naomi Blohm, senior market adviser with Stewart Peterson, suggests three factors to monitor closely moving forward that may keep bullish sentiment high in today’s Ag Marketing IQ blog. Click here to learn more.
Consultancy Strategie Grains lowered its estimates for 2021/22 EU soft wheat exports to 1.117 billion bushels, citing increased competition from South America and the Black Sea region, along with lower expectations for imports by Algeria and Egypt. Expectations for EU soft wheat production in 2022/23 is currently at 4.703 billion bushels.
France’s agriculture ministry estimates that the country’s 2021 soft wheat production totaled 1.301 billion bushels, which was a 21.4% increase from the prior year. France is Europe’s No. 1 wheat producer.
Japan purchased 4.3 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 47% was sourced from the U.S. The grain is for shipment in June.
Preliminary volume estimates were for 179,755 CBOT contracts, slipping slightly below Wednesday’s final count of 187,400.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
662.75
638.75
641.75
-5
22-May
660.5
637.5
640.5
-5
Soybeans
22-Mar
1633
1565.5
1574.25
-21.75
22-May
1634.5
1567.75
1576.5
-20
Soymeal $/ton
22-May
474.9
450.6
451.8
-9.4
Soyoil cents/lb
22-May
65.61
63.91
64.5
0.34
Wheat $/bushel
22-Mar
801.75
765.75
771.5
-13.75
22-May
808
772.25
778.75
-12.75
KC Wheat
22-Mar
830
794.75
801
-16
22-May
832
797.5
803.75
-14.5
MPLS Wheat
22-Mar
978.75
939
942.25
-13
22-May
975
935.25
938.25
-13.25
Live Cattle cents/lb
22-Feb
143.5
142.325
142.525
-0.375
Feeder Cattle cents/lb
22-Apr
173.975
171.425
171.8
-0.775
Lean Hogs cents/lb
22-Apr
107.7
103.175
103.5
-1.275
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
91.74
89.03
89.95
0.29
Diesel
22-Mar
2.8711
2.804
2.8249
0
Unleaded Gasoline $/gallon
22-Mar
2.7069
2.6422
2.6614
0.008
Natural Gas
22-Apr
4.033
3.867
3.954
-0.026
U.S. Dollar Index
22-Mar
96.01
95.16
95.54
0.046
Gold $/ounce
22-Mar
1842.2
1821
1832
-3.2
Copper
22-Feb
4.691
4.612
4.6225
0.022
Fertilizer Swaps
(as of 02/04)
DAP Tampa-index
810.0
0
DAP-New Orleans
772.7
34
Urea-New Orleans
668.0
70
Urea-Middle East
687.5
33
Urea-Black Sea
710.0
43
UAN (32%) New Orleans
606.3
0
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