Afternoon report: Corn, soybeans and wheat all slump lower to start the week
More bad news on Wall St. spilled over into the grain markets on Monday, causing another wave of technical selling amid fears of a potential recession both in the United States and overseas. Corn prices dropped more than 1.5%, and some wheat contracts fell more than 2.5% lower today. Soybeans were also down but incurred the least damage after trending 1% lower.
Damaging hurricane weather is on its way to Florida, but the Midwest and Plains will likely see little to no additional precipitation between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts a round of seasonally warm, dry weather for the central U.S. between October 3 and October 9.
It’s another tough day on Wall St., with the Dow down another 369 points in afternoon trading to 29,220. A surging U.S. Dollar, which can hurt profits for multinational companies, was partly to blame. Energy futures were also in the red today on global recession concerns. Crude oil dropped 2.75% this afternoon to $76 per barrel. Diesel was down 3.75%, while gasoline futures were narrowly mixed. The U.S. Dollar was up substantially today.
On Friday, commodity funds were net sellers of all major grain contracts, including corn (-11,000), soybeans (-11,500), soymeal (-3,500), soyoil (-6,500) and CBOT wheat (-9,500).
Corn
Corn prices succumbed to another round of technical selling on Monday after following a broad set of other commodities lower, suffering a double-digit setback by the close. December futures dropped 10.75 cents to $6.66, with March futures down 11.5 cents to $6.7025.
Corn basis bids fell 5 to 10 cents at two Midwestern ethanol plants and eased a penny lower at an Ohio elevator while holding steady elsewhere across the central U.S. on Monday.
Corn export inspections failed to match analyst estimates that ranged between 19.7 million and 31.5 million bushels after facing a moderate weekly decline to 18.1 million bushels. Mexico topped all destinations, with 9.9 million bushels. Cumulative totals for the 2022/23 marketing year are still trending above last year’s pace, however, with 63.3 million bushels since the start of September.
Prior to this afternoon’s crop progress report from USDA, analysts think the agency will make no changes to corn quality ratings, with 52% of the crop in good-to-excellent condition through September 25. Analysts also expect to see harvest progress move from 7% a week ago up to 13% through Sunday.
South Korea purchased 5.3 million bushels of animal feed corn from optional origins in an international tender that closed earlier today. The grain is comprised of two consignments that are both for arrival around January 23.
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CBOT speculators raised their net long position on corn by 13,874 contracts, lifting that total to 173,329 in the week ending September 20.
Preliminary volume estimates were for 190,088 contracts, which was moderately lower than Friday’s final count of 247,428.
Soybeans
Soybean prices followed a wide swath of other commodities lower after a round of technical selling on Monday, but losses were somewhat minimized on lingering concerns about U.S. crop quality and production potential. Prices even briefly tested modest gains this morning before getting dragged back into the red. November futures dropped 13.5 cents to $14.1225, with January futures down 15.25 cents to $14.1650.
Soybean basis bids were steady to mixed on Monday after tilting 2 to 5 cents higher at two interior river terminals while spilling 12 to 25 cents lower at three other Midwestern locations to start the week.
Soybean export inspections failed to match analysts’ expectations after landing at 9.5 million bushels. Trade estimates were much more robust, ranging between 14.1 million and 29.4 million bushels. Japan was the No. 1 destination, with 2.9 million bushels. Cumulative totals for the 2022/23 marketing year are still running slightly ahead of last year’s pace, with 43.0 million bushels.
Ahead of the next USDA crop progress report, out later this afternoon, analysts expect the agency to show stable soybean quality ratings, with 55% of the crop in good-to-excellent condition through September 25. Harvest progress is expected to advance from 3% a week ago up to 11% through Sunday.
Two Brazilian consultancies are reporting that the country’s 2022/23 soybean plantings are 1.5% to 2% complete so far, which is ahead of the historical average of 0.8%. Growers are expected to plant soybeans across an unprecedented 105.9 million acres this season, and governmental production estimates are anticipating a record-breaking effort of 5.512 billion bushels.
Soymeal prices in China have reached record levels, causing crushers to scale back purchases over the past few months. Chinese soybean imports in August dropped 25% year-over-year, and totals for the first eight months of 2022 are down nearly 9%. China is by far the world’s top soybean buyer.
How are your crops looking right now? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
Preliminary volume estimates were for 179,578 contracts, sliding just below Friday’s final count of 180,209.
Wheat
Wheat prices were slashed by a wave of technical selling largely triggered by domestic and overseas economic anxiety (which could negatively affect demand) coupled with a strengthening U.S. Dollar (which interestingly enough, rallied against every other currency today). The results was losses that mostly ranged between 1.75% and 2.5%. December Chicago SRW futures lost 23 cents to 8.5750, December Kansas City HRW futures fell 21.5 cents to $9.29, and December MGEX spring wheat futures dropped 18 cents to $9.3125.
Wheat export inspections turned in a solid total of 19.1 million bushels, although that still failed to match the prior week’s tally of 30.7 million bushels. Still, it trended toward the higher end of trade estimates, which ranged between 7.3 million and 29.4 million bushels. China was the No. 1 destination, with 4.2 million bushels. Cumulative totals for the 2022/23 marketing year are still slightly below last year’s pace, with 285.8 million bushels.
Prior to this afternoon’s crop progress report from USDA, analysts expect to see spring wheat harvest at 97% (up from 94% a week ago), with 33% of the 2022/23 winter wheat crop now planted (up from 21% last week).
Russian consultancy Sovecon estimates that the country will export 158 million bushels of wheat in September. If realized, that would be a monthly increase of 23% but still down 7.5% year-over-year. Russia is the world’s No. 1 wheat exporter.
A United Nations food security agency has issued an international tender to purchase 3.7 million bushels of milling wheat from optional origins that closes on Wednesday. The grain is for delivery in October and November and will be donated to several countries in east Africa, Asia and the Middle East.
Taiwan issued an international tender to purchase 1.9 million bushels of grade 1 milling wheat, sourced from the United States, which closes on September 29. The grain is for shipment in November.
Preliminary volume estimates were for 58,584 CBOT contracts, shifting moderately below Friday’s final count of 80,859.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
679
665.5
666.25
-10.75
23-Mar
683.5
670
670.75
-11.5
Soybeans
22-Nov
1433.75
1408.25
1411.25
-13.5
23-Jan
1439.25
1413.25
1416.25
-15.25
Soymeal $/ton
22-Dec
425.9
417
417.5
-5.7
Soyoil cents/lb
22-Dec
63.98
62
62.46
-1.22
Wheat $/bushel
22-Dec
890.75
854.25
858
-23
23-Mar
904
867.75
871.25
-23.25
KC Wheat
22-Dec
961.5
926.75
929.5
-21.5
23-Mar
958.25
923.75
926
-21.75
MPLS Wheat
22-Dec
959
929.25
931.25
-18
23-Mar
963.5
935.25
937.75
-16.5
Live Cattle cents/lb
22-Oct
145.35
142.9
143.625
-0.625
Feeder Cattle cents/lb
22-Oct
179.375
176.1
177.075
-1.275
Lean Hogs cents/lb
22-Dec
83.325
78.4
79.425
-3.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Nov
80.31
76.49
76.62
-2.12
Diesel
22-Oct
3.2663
3.1085
3.1264
-0.1107
Unleaded Gasoline $/gallon
22-Oct
2.4487
2.3395
2.3847
0.0017
Natural Gas
22-Nov
7.126
6.692
7.026
0.034
U.S. Dollar Index
22-Dec
114.445
112.665
114.17
1.208
Gold $/ounce
22-Oct
1646.4
1618.9
Copper
22-Sep
3.384
3.3
3.3
-0.0715
Fertilizer Swaps
(as of 09/16)
DAP Tampa-index
765.0
-52.5
DAP-New Orleans
837.8
-5.51
Urea-New Orleans
734.1
25.9
Urea-Middle East
865.0
-20
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
556.7
16.53
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