Afternoon report: Wheat prices suffer double-digit losses in Thursday’s session
Grain prices failed to find any forward momentum today as traders locked in profits and engaged in some technical selling when a once-probable railroad shutdown was averted after intense negotiations. Harvest pressure will also continue to apply seasonal downward pressure in the near-term for corn and soybeans. Corn prices eroded 0.75% lower, with soybeans down around 0.25%. Wheat losses were variable, ranging between 1% and 3% today.
More wet weather will be delivered to the Plains and upper Midwest between Friday and Monday, with large portions of Iowa, Minnesota and Wisconsin likely to receive at least another 1″ during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts widespread hot, dry conditions across the entire Midwest and Plains between September 22 and September 28, meantime.
On Wall St., the Dow was near-even after inching 2 points lower in afternoon trading to 31,133 after a mixed bag of economic data out today. Initial jobless claims were lower than expected. Retail sales also beat expectations but turned negative when excluding automobile sales. Numerous questions abound on whether the Federal Reserve’s aggressive interest rate policy will finally quell inflation or steer the country into a recession.
Energy futures also plummeted on recession fears, with crude oil down 3.75% this afternoon to $85 per barrel. Gasoline was also down around 3.75%, while diesel dropped more than 5%. The U.S. Dollar firmed slightly.
On Wednesday, commodity funds were net buyers of CBOT wheat (+4,000) contracts but were net sellers of corn (-9,000), soybeans (-9,500) and soyoil (-5,000). Funds were roughly even when trading soymeal contracts yesterday.
Corn
Corn prices suffered a moderate setback after a round of technical selling and profit-taking today. December futures dropped 5.75 cents to $6.7650, with March futures down 5.25 cents to $6.82.
Corn basis bids were mostly steady to weak after trending 5 to 15 cents lower at here Midwestern ethanol plants and dropping 10 cents at two other Midwestern locations on Thursday. An Ohio elevator bucked the overall trend after firming 7 cents higher today.
With a rail worker strike looming, union representatives and railroad executives have reached a preliminary agreement that will delay a nationwide shutdown that would have otherwise begun on Friday. Labor unions involved said they will not strike while the deal goes through a ratification process. Click here to learn more.
Corn export sales reached 23.0 million bushels for the week ending September 8. That was close to the middle of analyst estimates issued prior to the report, which ranged between 11.8 million and 35.4 million bushels. Cumulative totals are modestly ahead of last year’s pace in the first eight days of the 2022/23 marketing year.
Corn export shipments reached 16.8 million bushels last week. Mexico, China, Honduras, Nicaragua and El Salvador were the top five destinations.
Grain shipments in the Black Sea have resumed – somewhat – in recent weeks, but as Farm Futures grain market analyst Jacqueline Holland points out, only three Ukrainian ports have been operational since the Black Sea deal went into effect at the beginning of August. “Ukraine still has a massive backlog of corn supplies to be shipped from the 2021/22 marketing year when it harvested its second largest corn crop on record,” she notes. “This year’s crop, expected by USDA at 1.2 billion bushels, will only be the fifth largest Ukrainian corn harvest, but over 33% of it is expected to remain trapped in storage (best case scenario) for another year.” Click here for additional analysis in Holland’s new E-corn-omics blog.
Preliminary volume estimates were for 161,829 contracts, which was moderately below Wednesday’s final count of 184,161.
Soybeans
Soybean prices failed to hold onto modest overnight gains after a choppy session on Thursday, finishing with small losses of around 0.25% after some net technical selling today. November futures dropped 4 cents to $14.51, with January futures down 2.75 cents to $14.5825.
Soybean basis bids were steady to weak after spilling 4 to 30 cents lower across half a dozen Midwestern locations on Thursday.
Soybean exports saw old crop sales move to 31.0 million bushels, plus another 1.1 million bushels of new crop sales. That put actuals on the high end of trade estimates, which ranged between 11.0 million and 36.7 million bushels. Cumulative sales for the 2022/23 marketing year are doing better than a year ago but have just eight days of data to consider so far.
Soybean export shipments reached 13.8 million bushels last week. China, Indonesia, Pakistan, Mexico and Vietnam were the top five destinations.
The results from today’s monthly report from the National Oilseed Processors Association (NOPA) was a bit disappointing after the group showed an August crush of 165.538 million bushels. That was lower than the average trade guess of 166.110 million bushels and down 2.8% from July’s tally. It’s still 4.2% above year-ago results of 158.843 million bushels, however. Soyoil stocks are at a 14-month low, sliding to 1.565 billion pounds through August 31.
How do your farm’s crop conditions stack up against other operations in the U.S.? 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 161,068 contracts, falling moderately below Wednesday’s final count of 190,951.
Wheat
Wheat prices were slashed on a round of technical selling and profit-taking, pushing them off a two-month high after a once-looming rail strike has been averted for the time being. December Chicago SRW futures lost 28.25 cents to $8.44, December Kansas City HRW futures fell 21.75 cents to $9.2525, and December MGEX spring wheat futures dropped 8.5 cents to $9.2950.
Wheat exports were lackluster last week, only reaching 8.0 million bushels. That was on the very low end of trade estimates, which ranged between 7.3 million and 20.2 million bushels. Cumulative totals for the 2022/23 marketing year are still running a bit behind last year’s pace, with 232.7 million bushels.
Wheat export shipments were more robust, with 24.9 million bushels. Mexico, Japan, Nigeria, China and Italy accounted for the top five destinations.
Saudi Arabia issued an international tender to purchase 19.7 million bushels of wheat from optional origins that closes on Friday. The grain is for arrival between mid-November and late February.
As expected, Japan has purchased 3.6 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Of the total, 32% was sourced from the U.S. The grain is for arrival by the end of the year.
Preliminary volume estimates were for 78,169 CBOT contracts, rising a bit above Wednesday’s final count of 66,934.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
690
676.25
677.5
-5.75
23-Mar
695
681.5
682.75
-5.25
Soybeans
22-Nov
1468.5
1444
1451.5
-4
23-Jan
1474.25
1450.25
1458
-2.75
Soymeal $/ton
22-Dec
432.4
423.2
428
4.6
Soyoil cents/lb
22-Dec
65.25
63.32
64.3
-0.61
Wheat $/bushel
22-Dec
884.75
843.25
845
-28.25
23-Mar
899.25
859.25
860.5
-28
KC Wheat
22-Dec
958
922.75
926.25
-21.75
23-Mar
956.5
923.25
925.25
-22
MPLS Wheat
22-Dec
947.25
925.5
928.75
-8.5
23-Mar
955
932.5
935
-10.5
Live Cattle cents/lb
22-Oct
145.925
144.5
145.575
1.225
Feeder Cattle cents/lb
22-Oct
182.1
180.175
180.825
-0.6
Lean Hogs cents/lb
22-Dec
88.25
85.775
87.65
2.35
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Oct
89.15
84.53
84.86
-3.62
Diesel
22-Oct
3.3968
3.145
3.1957
-0.1832
Unleaded Gasoline $/gallon
22-Oct
2.5343
2.3846
2.4159
-0.1086
Natural Gas
22-Nov
9.159
8.269
8.334
-0.833
U.S. Dollar Index
22-Sep
109.925
109.375
109.7
0.069
Gold $/ounce
22-Oct
1696.8
1658.7
1662.3
-34.2
Copper
22-Sep
3.572
3.51
3.5155
-0.03
Fertilizer Swaps
(as of 09/02)
DAP Tampa-index
820.0
0
DAP-New Orleans
833.9
18.19
Urea-New Orleans
766.1
82.67
Urea-Middle East
863.0
68.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
531.9
55.12
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