Morning report: Favorable weekend harvest weather weighs on soybeans, corn. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 2-4 cents
Soybeans down 3-9 cents; Soymeal down $0.30/ton; Soyoil down $0.65/lb
Chicago wheat down 5-7 cents; Kansas City wheat down 9-10 cents; Minneapolis wheat down 3-4 cents
*Prices as of 7:15am 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(TM) 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! Soybean harvest is rapidly coming to a close across the country and more and more FFTF respondents are reporting corn harvest as complete. This week’s article focuses on yield reflection. Check out the article for the latest farmer insights!
Corn
Yesterday’s weekly Export Sales report from USDA was a lackluster one for corn export sales, with only 10.4 million bushels worth of new sales reported. New export sales volumes are substantially behind year-ago paces, adding bearish pressures to the corn futures market this morning.
“The outlook for U.S. corn exports is bearish, given the transport issues being faced by shippers due to low water level in the Mississippi river,” an analyst told Reuters overnight.
Corn futures traded $0.02-$0.04/bushel lower this morning on the prospects. Expect those sentiments to continue while a high dollar prices out international buyers and transportation logjams continue to slow grain flows on the Mississippi River. A stronger dollar and favorable harvest weather for this weekend also added bearish fuel to the flames this morning.
Soybeans
Soybean prices also slipped $0.03-$0.09/bushel this morning on export and currency woes. Clear skies forecast across the Heartland this weekend should help farmers with any remaining soybeans left standing in the fields finish up combining over the next week or so.
Wheat
Wheat prices tumbled $0.02-$0.011/bushel lower during the overnight trading session as the market was more susceptible to a stronger dollar and optimism for continued Black Sea shipping paces.
Drought-stressed Argentina, who is the world’s sixth largest wheat exporter and third largest corn exporter, received beneficial rains this week for the first time since May. That news sent both wheat and corn prices lower this morning as harvest outlooks for both crops in Argentina improved slightly.
Projections
Nerd alert: USDA announced yesterday morning that the Office of the Chief Economist (OCE) would be releasing its baseline Agricultural Projections to 2023 report on November 7, 2023 – earlier than usual.
These projections are just that – projections. The estimates are calculated using October 2022 WASDE intelligence and under the assumption that current market conditions and weather patterns will continue going forward.
Of course, we know these markets are anything but consistent these days. But this OCE report is legally required by the office for federal budget and oversight concerns. It is not necessarily one that the market is particularly reactive to, nor is it one that has a lot of lasting market power beyond the first quarter of the following year (by which time market conditions usually cause substantial deviations from the baseline estimates report).
I will be nerding out over this report and am excited to access it earlier than usual. I’ll be sure to feature report insights in this newsletter or on our site, so keep your eyes peeled for the latest nerd gossip!
Weather
After I wrote yesterday’s market report, it started snowing here on the Colorado Front Range! Ski season (and blissfully cooler temperatures for running – finally!) here we come!! But still, RIP to my beloved basil plants.
Farmers in the Heartland will get a couple days of clear skies to continue wrapping up 2022 harvest activities, according to NOAA’s short-term forecasts. Showers will move into the Central Mississippi River Valley and Eastern Corn Belt by Sunday morning, which could then slow any remaining harvest activity.
Today, a rain system will linger over the Southern Plains, where it could drop up to two inches of accumulation in East Texas and Southern Oklahoma – two areas in desperate need of moisture.
NOAA’s 6-10-day forecasts are now trending warmer for the Midwest and Plains and wetter for the western half of the country (plus Illinois and Wisconsin). Chances for rain are highest in the Pacific Northwest and Upper Midwest, though the Plains could see some moisture relief as well.
Those trends will continue to hold for the 8-10-day outlook, the chances for rain will be slightly more diminished than in the 6-10-day forecast.
Financials
‘Most farmers don’t readily associate themselves with Wall Street, but with all eyes on the markets during the latest Q3 2022 earnings season, it’s getting more difficult to not draw parallels between soaring farmgate incomes and high earnings for grain traders.
ADM and Bunge posted better-than-expected Q3 2022 earnings and noted in their respective earnings calls that even with the threat of a recession looming over the global economy, strong demand for grains and oilseeds across the world remains strong.
ADM’s Q3 2022 profit came close to doubling its year-ago metrics. The Decatur, Illinois-based grains behemoth reporting Q3 2022 earnings at $1.03 billion. A year ago, that figure stood at $526 million. As of Wednesday, ADM’s stock price was trading 38% higher on the year.
The S&P is down 18% during that same time frame.
Bunge’s stock rose 7% on Wednesday after the company reported better-than-expected revenues.
Tight grain supplies are the second part of the puzzle of high commodity prices that have fueled the processors’ gains. Uncertainty regarding the Ukrainian grain corridor’s access as the July 2022 “Black Sea Grains Initiative” approaches expiration in the second half of November continues to keep grain prices fluctuating.
But even with globalization increasingly under threat, these grain companies are still able to thrive as they match dwindling global supplies with increasingly hungry – and cash-strapped – buyers. Bunge and ADM both have a footprint in South America that allow the companies to withstand some of the slower exporting rates out of the U.S.
“I think globalization is done for a period of time,” Bunge CEO Greg Heckman said in the company’s earnings call on Wednesday. “When we had a supply problem or a demand surge globally, every origin and every destination was available to solve that problem in the past. And that’s no longer true.”
“Our strong South American footprint, which is always important to us, but it’s never been more important,” continued Heckman. “Where products can’t move to export, we’re running as hard as we can to process and to be able to continue to have the bids out there for the farmers.”
Expect these companies to come under increased scrutiny as consumer inflation soars and retail buyers become price sensitive to higher prices – responding by buying fewer units. Food processors are incurring higher costs as freight, labor, inventory, and raw materials costs rise across the economy, but in most cases, grocery shoppers are footing these additional price increases.
“They are trying to pass along to the consumer, and the consumer is not willing to pay for that,” Augusto Bassanini, chief executive of the Washington-based grain exporter United Grain Corp., cautioned shareholders and market analysts of the higher input costs.
A reporter friend of mine made an offhand comment regarding the latest earnings season for food and grain processors I found very fitting after listening to all the earnings calls – “Lots of congrats were in order on the [ADM, Bunge, Cargill, and United Grain] conference calls.”
“What we can see here in a very uncertain world is we have good, very good momentum going into 2023,” ADM Chief Executive Juan Luciano praised fellow ADM team members in ADM’s analyst call this week. “We anticipate ongoing resilient demand for our products.”
What else I’m reading this morning on our website, FarmFutures.com:
Another rail strike threatens the ag industry at a time when barge and trucking companies are already stretched thin.
Naomi Blohm’s technical analysis shows soybeans could still rise $2.50/bushel but fundamental forces will likely be the key driver of higher – or lower – soybean prices.
Virginia Tech ag economist David Kohl cautions growers to be aware of global financial and economic instability in the coming months.
AgMarket.Net’s Brian Splitt makes the case for protecting unpriced 2022 bushels as harvest season winds down across the Heartland.
Just a reminder – enrollment for 2023 ARC and PLC programs opened last week and will continue through March 15, 2022.
Morning Ag Commodity Prices – 10/28/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.8125
6.78
6.7925
-0.03
-0.44%
MAR ’23 CORN
$ / BSH
6.87
6.835
6.85
-0.0275
-0.40%
MAY ’23 CORN
$ / BSH
6.8625
6.8275
6.845
-0.025
-0.36%
JUL ’23 CORN
$ / BSH
6.8
6.7675
6.78
-0.03
-0.44%
SEP ’23 CORN
$ / BSH
6.33
6.295
6.315
-0.035
-0.55%
DEC ’23 CORN
$ / BSH
6.215
6.1775
6.185
-0.0325
-0.52%
AR2 ’24 CORN
$ / BSH
6.2725
6.25
6.26
-0.025
-0.40%
AY2 ’24 CORN
$ / BSH
6.2725
#N/A
6.3075
0
0.00%
JUL ’24 CORN
$ / BSH
6.2575
6.245
6.2475
-0.025
-0.40%
NOV ’22 SOYBEANS
$ / BSH
13.8775
13.725
13.75
-0.0725
-0.52%
JAN ’23 SOYBEANS
$ / BSH
13.9875
13.8275
13.86
-0.075
-0.54%
MAR ’23 SOYBEANS
$ / BSH
14.07
13.91
13.945
-0.075
-0.53%
MAY ’23 SOYBEANS
$ / BSH
14.1425
13.99
14.0175
-0.0775
-0.55%
JUL ’23 SOYBEANS
$ / BSH
14.1725
14.0275
14.04
-0.085
-0.60%
AUG ’23 SOYBEANS
$ / BSH
14.0175
13.895
13.9175
-0.0575
-0.41%
SEP ’23 SOYBEANS
$ / BSH
13.6575
13.5825
13.6125
-0.0375
-0.27%
NOV ’23 SOYBEANS
$ / BSH
13.5625
13.455
13.49
-0.025
-0.18%
AN2 ’24 SOYBEANS
$ / BSH
13.5525
13.5525
13.5525
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.5
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.4825
#N/A
13.4875
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
72.45
71.51
71.61
-0.69
-0.95%
JAN ’23 SOYBEAN OIL
$ / LB
69.69
68.8
68.96
-0.6
-0.86%
DEC ’22 SOY MEAL
$ / TON
416.7
412.7
415.1
-0.3
-0.07%
JAN ’23 SOY MEAL
$ / TON
408.8
405.6
407.7
-0.2
-0.05%
MAR ’23 SOY MEAL
$ / TON
400.3
397.7
399.5
-0.3
-0.08%
MAY ’23 SOY MEAL
$ / TON
395.7
393.2
395
-0.3
-0.08%
JUL ’23 SOY MEAL
$ / TON
395
392.5
394.1
-0.3
-0.08%
DEC ’22 Chicago SRW
$ / BSH
8.4025
8.275
8.32
-0.065
-0.78%
MAR ’23 Chicago SRW
$ / BSH
8.595
8.47
8.5075
-0.0725
-0.84%
MAY ’23 Chicago SRW
$ / BSH
8.6925
8.58
8.635
-0.05
-0.58%
JUL ’23 Chicago SRW
$ / BSH
8.6925
8.58
8.6075
-0.0775
-0.89%
SEP ’23 Chicago SRW
$ / BSH
8.7075
8.6425
8.6625
-0.0775
-0.89%
DEC ’23 Chicago SRW
$ / BSH
8.7825
8.72
8.775
-0.0425
-0.48%
AR2 ’24 Chicago SRW
$ / BSH
8.7575
8.72
8.7275
-0.0925
-1.05%
DEC ’22 Kansas City HRW
$ / BSH
9.345
9.1875
9.225
-0.0975
-1.05%
MAR ’23 Kansas City HRW
$ / BSH
9.34
9.185
9.22
-0.0975
-1.05%
MAY ’23 Kansas City HRW
$ / BSH
9.32
9.1725
9.2
-0.1025
-1.10%
JUL ’23 Kansas City HRW
$ / BSH
9.26
9.1325
9.155
-0.0925
-1.00%
SEP ’23 Kansas City HRW
$ / BSH
9.1775
9.1375
9.165
-0.08
-0.87%
DEC ’23 Kansas City HRW
$ / BSH
9.18
9.18
9.18
-0.105
-1.13%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.2325
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.505
9.45
9.485
-0.02
-0.21%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.555
9.5225
9.555
-0.025
-0.26%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.6
9.5825
9.595
-0.0375
-0.39%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.5825
9.58
9.58
-0.0225
-0.23%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.295
#N/A
9.32
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.26
#N/A
9.2875
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.265
0
0.00%
DEC ’21 ICE Dollar Index
$
110.925
110.135
110.645
0.192
0.17%
DE ’21 Light Crude
$ / BBL
88.76
87.58
88.23
-0.85
-0.95%
JA ’21 Light Crude
$ / BBL
87.51
86.39
87.04
-0.79
-0.90%
NOV ’22 ULS Diesel
$ /U GAL
4.4099
4.33
4.4099
0.076
1.75%
DEC ’22 ULS Diesel
$ /U GAL
3.7282
3.6814
3.7241
0.0174
0.47%
NOV ’22 Gasoline
$ /U GAL
2.9999
2.971
2.9824
-0.0292
-0.97%
DEC ’22 Gasoline
$ /U GAL
2.6368
2.6048
2.6276
-0.0139
-0.53%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
178.125
0
0.00%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
180.45
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
151.4
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
153.425
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
85.125
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
88.15
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.81
21.81
21.81
-0.02
-0.09%
NOV ’22 Class III Milk
$ / CWT
20.48
20.42
20.48
0.09
0.44%
DEC ’22 Class III Milk
$ / CWT
18.74
#N/A
18.8
0
0.00%
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