Volatile grain prices shift sharply lower.
Corn, soybean and wheat contracts all fell significantly lower today
Grain prices soared substantially higher, sending some contracts to multiyear highs earlier this week. But today, fears of being overbought gripped the markets, sending prices plummeting on a round of technical selling and profit-taking. Winter wheat contracts closed with limit down losses, while corn prices eroded 5% lower and soybeans lost around 4.25%.
Very little rain or snow is expected in the Midwest or Plains between Saturday and Tuesday, although the Mid-South will see some moderate moisture during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally cool weather creeping back into the Northern Plains between March 4 and March 10, with widespread wetter-than-normal conditions likely for the entire central U.S.
On Wall St., the Dow climbed 765 points higher in afternoon trading to 33,989 as a very volatile week winds down. Stocks fell sharply earlier this week amid Russia’s invasion of Ukraine but now appear to have been oversold, hence today’s correction. Energy prices cooled, with crude oil falling 1.25% this afternoon to track back below $92 per barrel. Gasoline and diesel each dropped around 1.75%. The U.S. Dollar softened moderately.
On Thursday, commodity funds were net buyers of corn (+17,500), soyoil (+6,500) and CBOT wheat (+21,000) contracts but were net sellers of soybeans (-13,500) and soymeal (-3,500).
Corn
Corn prices were hammered along with other grain prices as traders spent Friday’s session in an attitude of correction after fears of being overbought in moves earlier this week. March futures lost 35 cents to $6.60, with May futures down 34.75 cents to $6.5550.
Corn basis bids were steady to weak after tilting 4 to 6 cents lower across three Midwestern locations on Friday.
Total corn export sales for the week ending February 17 reached 45.6 million bushels. Old crop sales trended 27% higher week-over-week and inched 4% above the prior four-week average. Sales were also on the high end of analyst estimates, which ranged between 19.7 million and 47.2 million bushels. Cumulative sales for the 2021/22 marketing year have finally caught up to and now slightly exceed last year’s pace, with 953.4 million bushels.
Corn export shipments climbed to a marketing-year high of 74.3 million bushels. China was the top destination, with 21.9 million bushels. Japan, Mexico, Canada and Guatemala rounded out the top five.
U.S. Trade Representative Katherine Tai noted U.S./China trade relations is “extremely difficult [already] and getting more difficult,” speaking at the USDA Agricultural Outlook Forum. “We would like to China to play by our rules, but we cannot make decisions for China,” Tai said. Meetings have been held since last October that have focused on holding China accountable for its Phase 1 trade commitments.
Taiwan passed on multiple offers in its international tender to purchase 2.6 million bushels of animal feed corn, which closed earlier today. After prices spiked earlier in the week, European traders speculated that some Asian importers will delay purchases unless red-hot prices continue to cool off.
Preliminary volume estimates were for 541,736 contracts, down from Thursday’s atypically large tally of 866,454.
Soybeans
Soybean prices followed other grains lower on a round of technical selling and profit-taking. Losses were severe but still not as bad as what corn and wheat contracts incurred. March futures plummeted 71.75 cents to $15.8975, with May futures down 70.75 cents to $15.8325.
Soybean basis bids were steady to mixed across the central U.S. on Friday, falling as much as 5 cents lower at two Midwestern processors while trending 4 to 5 cents higher at two other locations today.
Private exporters reported two more large soybean sales to USDA on Friday. The first was for 12.3 million bushels for delivery to China during the 2022/23 marketing year, which begins September 1. Private exporters announced the additional sale of 10.5 million bushels to unknown destinations. Of the total, 56% is for delivery during the current marketing year, with the remainder for delivery in 2022/23.
Soybean exports for the week ending February 17 saw combined old and new crop sales reach 77.1 million bushels. That exceeded the entire range of trade guesses, which came in between 34.9 million and 75.3 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 1.471 billion bushels.
Soybean export shipments were 8% higher from a week ago but 5% below the prior four-week average, with 46.3 million bushels. China was the No. 1 destination, with 14.4 million bushels. Egypt, Mexico, Germany and Japan rounded out the top five.
Brazil’s Safras & Mercado has lowered its 2022 soybean export estimates by 5.8% from its prior forecast, which has dropped to 2.958 billion bushels. Soy crush estimates held steady, at 1.745 billion bushels.
Meantime, there’s growing concern that Brazilian farmers, who lean on Russia as their biggest supplier of NPK, could face a supply pinch and suffer soaring fertility costs after Russia invaded Ukraine earlier this week. “Brazil has the most to lose among the world’s largest producers of soy,” Agrinvest Commodities analyst Jefferson Souza told Reuters yesterday. Some groups have already begun exploring alternative supply sources.
Brazil’s soyoil exports could benefit this year as India looks for alternative sources for vegetable oils amid struggles with its typical sources in Ukraine, Russia and Indonesia. “India is very active on the market,” according to Andre Nassar, president of Abiove. “It went to Argentina, the United States, it came to Brazil, they are talking to everyone.” Abiove predicts 2022 Brazilian soyoil exports will top 1.7 million metric tons – a record, if realized.
Preliminary volume estimates were for 313,354 contracts, spilling moderately below Thursday’s final count of 460,742.
Wheat
Wheat prices were slashed on a round of technical selling and profit-taking as fears over supply disruptions in the Black Sea region eased somewhat, turning to fears that traders were holding an overbought position. Some contracts lost more than 8% by the close. March Chicago SRW futures fell 80.25 cents to $8.4575, March Kansas City HRW futures fell 74 cents to $8.89, and March MGEX spring wheat futures fell 70.5 cents to $9.5950.
Old crop wheat sales jumped noticeably higher for the week ending February 17, with 19.0 million bushels. New crop sales added another 6.2 million bushels, for a total of 25.2 million bushels. That bested the entire range of analyst estimates, which came in between 3.7 million and 20.2 million bushels. Cumulative totals for the 2021/22 marketing year are still tracking around 125 million bushels behind last year’s pace, with a total of 506.4 million bushels so far.
Wheat export shipments jumped 42% above the prior four-week average to 20.1 million bushels. Japan topped all destinations, with 3.3 million bushels. Nigeria, Mexico, Taiwan and South Korea rounded out the top five.
French farm office FranceAgriMer estimates that 93% of the country’s soft wheat crop is rated in good-to-excellent conditions through February 21, dropping two points below the prior week’s ratings but still above year-ago ratings of 87%.
Preliminary volume estimates were for 209,780 CBOT contracts, shifting 27% below Thursday’s final count of 288,034.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
707
657
659.5
-35
22-May
701.75
655.25
655.75
-34.75
Soybeans
22-Mar
1678.5
1585.5
1590.25
-71.75
22-May
1670
1579
1584.5
-70.75
Soymeal $/ton
22-May
460.7
441.7
442.7
-13.3
Soyoil cents/lb
22-May
73.04
68.22
68.93
-3.17
Wheat $/bushel
22-Mar
951.25
841.5
843
-80.25
22-May
960.75
859.75
859.75
-75
KC Wheat
22-Mar
971.75
877.5
886.75
-74
22-May
981
891
891
-75
MPLS Wheat
22-Mar
1034
943
952.25
-70.5
22-May
1025
960.25
960.25
-60
Live Cattle cents/lb
22-Feb
141.8
138.85
140
-0.525
Feeder Cattle cents/lb
22-Apr
167.5
163.775
164.9
1.1
Lean Hogs cents/lb
22-Apr
110.425
107.825
108.1
-2.025
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
95.64
90.06
91.82
-0.99
Diesel
22-Mar
2.9699
2.8045
2.8599
-0.037
Unleaded Gasoline $/gallon
22-Mar
2.8396
2.7099
2.7231
-0.0479
Natural Gas
22-May
4.724
4.435
4.517
-0.139
U.S. Dollar Index
22-Mar
97.225
96.6
96.67
-0.448
Gold $/ounce
22-Apr
1925
1884.4
1890
-35.4
Copper
22-Mar
4.52
4.4485
4.4885
0.0325
Fertilizer Swaps
(as of 02/25)
DAP Tampa-index
842.5
7.5
DAP-New Orleans
857.1
19.29
Urea-New Orleans
683.4
99.21
Urea-Middle East
665.0
65
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
606.3
0
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
