Winter wheat prices tilt 2% higher.
Corn and soybeans find modest positive momentum on Thursday
Grain prices were back in the green on Thursday, with winter wheat leading the charge – rising 1.75% to 2% higher as fear of a possible Russian invasion into Ukraine came back into focus. Corn and soybeans moved modestly higher on the ensuing spillover strength, garnering additional support from a solid round of export sales data from USDA this morning.
The upper Midwest and Northern Plains have the best opportunity to see some additional rain or snow between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Cooler-than-normal conditions are likely for the Midwest and Plains between February 24 and March 2, per NOAA’s new 8-to-14-day outlook. Seasonally wet weather may be in store for the Ohio River Valley during this time.
Worries over a potential Russian invasion of Ukraine short-circuited Wall St. again today, with the Dow falling 526 points in afternoon trading to 34,407. Energy futures were also negatively affected, with crude oil down more than 2% to fall back below $92 per barrel. Nearby diesel contracts dropped more than 2.5%, with gasoline down around 1.25%. The U.S. Dollar firmed slightly.
On Wednesday, commodity funds were net buyers of corn (+9,000), soybeans (+21,500), soymeal (+5,250) and soyoil (+4,500) contracts and were roughly even trading CBOT wheat contracts.
Corn
Corn prices fought through a choppy session and managed to close slightly higher Thursday. Spillover strength from wheat helped, as did a healthy round of export data from USDA. March futures picked up 1.5 cents to $6.4850, with May futures adding 1.75 cents to $6.4750.
Corn basis bids trended 3 cents higher at an Ohio elevator and 6 cents higher at an Illinois river terminal while holding steady elsewhere across the Midwest on Thursday.
Corn exports saw 32.3 million bushels in old crop sales plus another 4.5 million bushels in new crop sales for a total tally of 36.8 million bushels in the week through February 10. That was toward the higher end of trade estimates, which ranged between 19.7 million and 49.2 million bushels. Cumulative totals for the 2021/22 marketing year are still trending slightly below last year’s pace, with 879.2 million bushels.
Corn export shipments jumped to a marketing-year high of 63.7 million bushels. Mexico was the No. 1 destination, with 18.8 million bushels.
In January, the U.S. generated around 1.21 billion ethanol blending credits, which was down from December’s total of 1.30 billion. Biodiesel blending credits also fell from 584 million in December down to 355 million last month.
A poll of 14 analysts suggests that Brazilian corn production could reach 4.451 billion bushels – a record, if realized. An uptick in acreage, along with the percentage of plantings that occurred during the ideal window, are two factors that could drive production to this level. However, La Nina conditions could dampen yield prospects.
For the first time in four years, farm bankruptcies finally trended lower in 2021, per a recent dig through the data by Farm Bureau. In the Midwest, Chapter 12 filings were down 52% year-over-year. Challenges still lie ahead, however. “Many farmers are concerned that higher prices for their crops will retreat faster than higher costs for their inputs, putting farm profitability under stress,” says Veronica Nigh, Senior Economist for the American Farm Bureau Federation. “Those operations that have experienced multiple years of financial stress will be those most at risk this year.” Click here to learn more.
Preliminary volume estimates were for 263,265 contracts, shifting slightly above Wednesday’s final count of 253,025.
Soybeans
Soybean prices moved modestly higher after some light technical buying today, thanks in part to spillover strength from wheat and lingering questions about the exact size of this season’s South American crops. March and May futures each added 3 cents to close at $15.9050 and $15.9425, respectively.
Soybean basis bids were steady to mixed across Midwestern locations on Thursday, moving as much as 10 cents higher at an Illinois processor and dropping as much as 2 cents at an Iowa river terminal.
Private exporters announced to USDA the sale of 4.4 million bushels of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which began September 1.
Old crop soybean sales improved 26% from the prior four-week average to 50.0 mil-lion bushels. New crop sales contributed an additional 56.1 million bushels for a total of 106.1 million bushels. That was on the higher end of trade estimates, which came in between 57.0 million and 121.3 million bushels. Cumulative sales for the 2021/22 marketing year are still more than 400 million bushels below last year’s pace, reaching 1.426 billion bushels.
Soybean export shipments slid 7% lower week-over-week and 19% below the prior four-week average, to 44.6 million bushels. China was the No. 1 destination, with 21.2 million bushels.
In Argentina, the Buenos Aires grains exchange reported that little rain may fall across the country during the next several days, but heavier precipitation is more likely toward the latter end of February. The country’s soybean and corn production has been struggling this season due to drought conditions. Earlier this month, the group trimmed its 2021/22 soybean production estimates to 1.543 billion bushels.
Brian Basting, commodity research analyst for Advance Trading, has been thinking about 2008 lately. “I was a year into my career as a commodity broker in 2008, and even though I didn’t know it at the time, I was taught some very valuable lessons,” he notes. Click here to read Basting’s latest commentary in today’s Ag Marketing IQ blog and see the chart that shows some eerie similarities between 2008 and 2022.
Preliminary volume estimates were for 237,102 contracts, tracking slightly higher than Wednesday’s final count of 221,572.
Wheat
Wheat prices were back in the green as geopolitical turmoil in the Black Sea Region triggered a round of technical buying today. Winter wheat contracts saw a bigger boost, climbing 1.75% to 2% higher, while spring wheat contracts captured moderate gains of around 0.5%. March Chicago SRW futures rose 16.25 cents to $7.9675, March Kansas City HRW futures gained 13.75 cents to $8.2175, and March MGEX spring wheat futures added 4 cents to $9.56.
Wheat exports saw total old and new crop sales only reach 4.7 million bushels. Trade estimates prior to today’s report showed a wide range that came in between 2.8 million and 23.9 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 486.3 million bushels.
Wheat export shipments fared better, trending 9% above the prior four-week aver-age to 15.1 million bushels. Mexico was the top destination, with 3.4 million bushels.
The International Grains Council kept its estimates for 2021/22 world wheat production steady from its prior projection of 28.697 billion bushels. IGC also noted global corn production potential eased slight, falling to 1.023 billion metric tons.
European traders believe Algeria has purchased as much as 25.7 million bushels of milling wheat from optional origins in an international tender that closed earlier this week. Algeria typically does not disclose the results of its tenders. The grain is for shipment in April.
Egypt purchased 6.6 million bushels of wheat from Romania in an international tender that recently closed. The grain is for shipment in early April.
Japan purchased 2.0 million bushels of food-quality wheat from the United States in a regular tender that closed earlier today. The grain is for shipment between March 21 and April 20.
The Philippines purchased 1.7 million bushels of animal feed wheat from Australia in an international tender that closed earlier this week. The grain is for shipment in June and July.
Preliminary volume estimates were for 123,870 CBOT contracts, which is moderately above Wednesday’s final count of 82,389.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
652
642.75
650
1.5
22-May
650.75
641.75
649.25
1.75
Soybeans
22-Mar
1606
1576.5
1592
3
22-May
1609.75
1579.75
1596
3
Soymeal $/ton
22-May
453.3
444.2
447.5
0.1
Soyoil cents/lb
22-May
67.48
66.34
66.88
-0.26
Wheat $/bushel
22-Mar
799.25
775.5
798
16.25
22-May
805.5
781.5
804.75
17.5
KC Wheat
22-Mar
825.5
803.5
823
13.75
22-May
829.5
808
827.75
14.25
MPLS Wheat
22-Mar
962
948.25
957.25
4
22-May
962
946.5
957.25
5.5
Live Cattle cents/lb
22-Feb
143.9
143.125
143.5
0.375
Feeder Cattle cents/lb
22-Apr
171.95
170.825
171.2
-0.975
Lean Hogs cents/lb
22-Apr
111.55
109.05
111.525
2.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
93.36
90.62
91.44
-2.22
Diesel
22-Mar
2.8465
2.7484
2.7847
-0.0728
Unleaded Gasoline $/gallon
22-Mar
2.671
2.5976
2.6472
-0.0299
Natural Gas
22-Apr
4.645
4.343
4.417
-0.155
U.S. Dollar Index
22-Mar
96.115
95.68
95.805
0.108
Gold $/ounce
22-Mar
1902.3
1869.9
1900.7
30.5
Copper
22-Feb
4.52
4.5185
4.52
-0.0205
Fertilizer Swaps
(as of 02/11)
DAP Tampa-index
810.0
0
DAP-New Orleans
804.7
32
Urea-New Orleans
606.3
-62
Urea-Middle East
665.0
-23
Urea-Black Sea
660.0
-50
UAN (32%) New Orleans
606.3
0
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