Afternoon report: Soybeans trend moderately lower in Wednesday’s session
Grains were mixed but mostly higher in midweek trading as traders continued to assess the latest weather forecasts and began squaring positions ahead of the next World Agricultural Supply and Demand Estimates report (WASDE) from USDA, out Friday morning (more on this below). Corn prices were up around 1%, while wheat captured double-digit gains today. Soybeans posted large gains this morning, but they evaporated by the close.
Not a lot of rain is expected to fall across the central U.S. between Thursday and Sunday, but many areas will at least see some measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry weather for the Northern Plains and upper Midwest between August 17 and August 23, with cooler-than-normal conditions spreading across the Corn Belt.
On Wall St., the Dow climbed 478 points in afternoon trading to 33,252 after the consumer price index showed some better-than-expected inflation results. Energy futures made moderate inroads, with crude oil up more than 1.5% to surpass $91 per barrel. Diesel rose 2.25%, with gasoline jumping 3.75% higher. The U.S. Dollar softened significantly.
On Tuesday, commodity funds were net buyers of corn (+8,000), soybeans (+13,000), soymeal (+3,500) and CBOT wheat (+1,000) contracts. Funds were roughly even when trading soyoil contracts yesterday.
Corn
Corn prices suffered some late-session technical selling today but still managed to keep moderate gains by the close. September futures added 6.25 cents to $6.2175, with December futures up 4.5 cents to $6.1850.
Corn basis bids were steady to weak on Wednesday after sliding 2 to 5 cents lower at three Midwestern locations today.
The latest data from the U.S. Energy Information Administration showed that ethanol production for the week ending August 5 reached a daily average of 1.022 million barrels, moving modestly lower week-over-week. Production has consistently stayed above the 1-million-barrel-per-day benchmark since late May.
Ahead of the next USDA export report, out Thursday morning, analysts expect the agency to show corn sales ranging between 3.9 million and 35.4 million bushels for the week ending August 4.
And ahead of Friday’s WASDE report from USDA, analysts expect the agency to lower corn yield estimates from 177.0 bushels per acre in July to 175.9 bpa in the August report. That would erode production potential to 14.392 billion bushels, if realized. Analysts are also expecting USDA to show harvested area falling slightly to 81.837 million acres.
“Growers are fighting to maintain positivity after receiving some lucky breaks amid another turbulent growing season,” observes Farm Futures grain market analyst Jacqueline Holland after reviewing the latest comments collected from Feedback From The Field. Click here to catch up on what farmers have been saying and learn how you can participate.
Grain traveling the nation’s railways totaled 19,916 carloads this week, bringing 2022’s tally to 689,617 carloads – trending 6.4% below last year’s pace so far.
Preliminary volume estimates were for 339,343 contracts, trending slightly above Tuesday’s final count of 320,950.
Soybeans
Soybean prices suffered a moderate technical setback after failing in its bid to move higher again on Wednesday. Prices were up more than 40 cents briefly this morning but closed 0.3% to 0.6% lower amid a late-session selloff. August futures dropped 4.5 cents to $16.8875, with September futures down 9 cents to $15.0325.
Soybean basis bids tumbled 22 cents lower at an Ohio elevator and dropped 10 cents at an Iowa river terminal while holding steady elsewhere across the central U.S. on Wednesday.
Private exporters announced to USDA the sale of 7.2 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which begins September 1.
Ahead of Thursday morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 7.3 million and 33.1 million bushels for the week ending August 4. Analysts also expect to see soymeal sales ranging between 125,000 and 525,000 metric tons, plus up to 22,000 MT of soyoil sales.
Prior to Friday’s WASDE report from USDA, analysts expect to see a modest decrease in soybean yields, moving from 51.5 bushels per acre in July down to 51.1 bpa. That would also create a modest drop in production potential, sliding to 4.481 billion bushels. Harvested area is expected to come in at 87.724 million acres.
Preliminary volume estimates were for 168,527 contracts, which was slightly higher than Tuesday’s final count of 154,178.
Wheat
Wheat prices improved 1.4% to 2.8% on Wednesday, boosted by a flurry of overseas sales and a weakening U.S. Dollar. An ongoing heatwave in Europe lent additional support. September Chicago SRW futures gained 22 cents to $8.0350, September Kansas City HRW futures rose 23 cents to $8.7475, and September MGEX spring wheat futures added 12.75 cents to $9.0550.
Prior to tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 22.0 million bushels for the week ending August 4.
Ahead of Friday’s WASDE report from USDA, analysts expect to see all-wheat production in 2022/23 to increase slightly, to 1.791 billion bushels. That would include 1.203 billion bushels of winter wheat, plus 510 million bushels of spring wheat and 77 million bushels of durum.
Romania’s agriculture minister says the country’s 2022wheat harvest will be 15% to 18% below last year’s record-breaking effort of 415.2 million bushels. This year’s crop was more vulnerable to high temperatures and drought.
Egypt’s supply minister reported that the country has strategic wheat reserves that are sufficient for more than seven months. Egypt’s strategic vegetable oil reserves should last 5.3 months.
Japan hopes to secure 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley in a simultaneous buy-and-sell auction that will be held on August 19. The grain would be for arrival in late January. Japan also just purchased 3.0 million bushels of food-quality wheat from the United States and Canada in regular tenders that closed earlier today.
The Philippines likely passed on all offers in its international tender to purchase 4.4 million bushels of wheat and 5.5 million bushels of animal feed barley (prices were regarded as too high). A new tender will likely be issued next week and will have grain shipped between October and January.
Preliminary volume estimates were for 128,823 CBOT contracts, moving slightly above Tuesday’s final count of 117,542.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
632.5
613
621.25
6.25
22-Dec
628
611
618.5
4.5
Soybeans
22-Sep
1557.25
1500.5
1509
-9
22-Dec
1454.75
1422
1427.75
-2.5
Soymeal $/ton
22-Sep
468.1
446.6
449.6
1.4
Soyoil cents/lb
22-Sep
67.5
64.76
67.38
1.34
Wheat $/bushel
22-Sep
808.5
780.25
799.75
22
22-Dec
824.25
798.75
816.25
20.25
KC Wheat
22-Sep
878.5
851.25
872.75
23
22-Dec
883
857.75
876.75
20.75
MPLS Wheat
22-Sep
916.25
891
906.25
12.75
22-Dec
929.5
904.5
919.25
12.75
Live Cattle cents/lb
22-Aug
139.375
138.125
139.375
1.4
Feeder Cattle cents/lb
22-Sep
185.275
182.05
184.975
2.475
Lean Hogs cents/lb
22-Oct
101
99.8
100.975
1.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
92.43
87.66
91.8
1.3
Diesel
22-Aug
3.4344
3.2458
3.4109
0.0771
Unleaded Gasoline $/gallon
22-Aug
3.0858
2.9214
3.0697
0.1095
Natural Gas
22-Oct
8.249
7.703
8.237
0.412
U.S. Dollar Index
22-Sep
106.29
104.515
105.055
-1.197
Gold $/ounce
22-Sep
1809.1
1788.2
1795
1
Copper
22-Aug
3.6555
3.6075
3.648
0.0555
Fertilizer Swaps
(as of 08/05)
DAP Tampa-index
912.5
-4
DAP-New Orleans
837.8
0
Urea-New Orleans
661.4
79.92
Urea-Middle East
765.0
57.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
439.8
0
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