Afternoon report: Prices have reached the highest levels since 2012.
Grain prices continued to push higher on Monday as they remain in a bullish environment due to domestic and foreign factors. In the U.S., rainy weather in the Corn Belt could cause planting delays, while drought in the Plains keeps the winter wheat crop in jeopardy. Overseas, Ukraine’s struggles to export grain has created an ongoing supply pinch. As a result, corn prices jumped above $8 per bushel for the first time since 2012 on gains of nearly 3% today. Soybeans rose almost 2%, with wheat gains varying between 2% and 3%.
Most of the Corn Belt will see measurable moisture between Tuesday and Friday, but few areas will gather more than 0.5″, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook near-normal precipitation amounts for most of the central U.S. between April 25 and May 1, with seasonally cool weather likely for the northern third of the country as the month winds down.
On Wall St., the Dow firmed 55 points to 34,507 in afternoon trading with the banking sector leading the way today. Investors remain skittish about rising bond rates, however, which can be a precursor to recessions. Energy futures were mixed. Crude oil tracked more than 0.75% higher this afternoon to stay above $107 per barrel. Nearby diesel contracts were up nearly 0.5%, but gasoline dropped more than 1%. Volatile natural gas jumped nearly 7% higher. The U.S. Dollar firmed moderately.
Last Thursday, commodity funds were net buyers of corn (+2,500), soybeans (+2,000), soymeal (+2,000) and soyoil (+2,000) contracts but were net sellers of CBOT wheat (-7,000).
Corn
Corn prices made it above $8 per bushel for one of the few times ever, thanks to ongoing circumstances in both the U.S. and abroad. Domestically, the concern is that high nitrogen prices and possible planting delays will turn more acres toward soybeans. Overseas, the war in Ukraine continues to severely strain the country’s export abilities. May futures rose 22 cents to $8.1225, with July futures up 22.25 cents to $8.06.
Corn basis bids were steady to mixed on Monday after sliding 2 cents lower at an Ohio elevator while firming 2 to 3 cents higher at two interior river terminals today.
Corn export inspections faced a moderate decline for the week ending April 14, falling to 44.8 million bushels. That was also on the lower end of trade estimates, which ranged between 41.3 million and 70.9 million bushels. China was the No. 1 destination, with 15.8 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 1.307 billion bushels.
USDA’s next crop progress report will be released later this afternoon, and analysts expect to see the agency show corn planting progress move from 2% a week ago up to 5% through April 17. Individual estimates ranged from 3% to 6%.
China’s year-to-date corn imports have reached 279.5 million bushels through March, which is a 5.5% increase versus year-ago totals, according to the latest available customs data.
Dealing with high fertilizer prices is a pain. How long will these trends linger? There are no easy answers, but short-term issues continue to dog the industry, warns grain market analyst Bryce Knorr. “The latest evidence of that came from CF Industries, which last week said it was unable to accept new orders via Union Pacific while existing orders of urea and UAN faced new delays after the railroad curtailed service,” he notes. Knorr takes a deeper dive into the situation in the latest Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 309,456 contracts, shifting slightly ahead of Thursday’s final count of 286,954.
Soybeans
Soybean prices enjoyed a round of technical buying to start the week, thanks in part to a solid round of crushing data as well as spillover strength from corn and wheat. May futures rose 32.75 cents to $17.15, with July futures up 28.75 cents to $16.94.
Soybean basis bids were steady to firm on Monday after rising 4 to 6 cents at three Midwestern locations today.
Soybean export inspections trended moderately higher week-over-week, reaching 35.7 million bushels. That was on the higher end of trade estimates, which came in between 18.4 million and 42.3 million bushels. China was the No. 1 destination, with 12.9 million bushels. Cumulative totals for the 2021/22 marketing year are still far behind last year’s pace, with 1.689 billion bushels.
Soybean planting is barely underway, with analysts estimating that USDA will report the 2022 crop is only 2% planted through April 17 when the agency releases its next crop progress report later this afternoon. Louisiana and Mississippi are typically the first states to get rolling.
Late last week, the National Oilseed Processors Association (NOPA) reported a record-large soybean crush for March, with 181.759 million bushels. NOPA also reported that soyoil stocks declined 7.3% to 1.908 billion pounds, but soyoil stocks were still 7.7% above year-ago totals of 1.771 billion pounds.
During the first quarter of 2022, China’s soybean imports have reached 745.5 million bushels, according to the latest customs data. Hat’s a 4.2% decline from last year’s pace so far. China is by far the world’s No. 1 soybean buyer.
Preliminary volume estimates were for 169,135 contracts, falling moderately below Thursday’s final count of 195,764.
Wheat
Wheat prices made substantial inroads to start the week on a round of technical buying spurred largely by U.S. quality concerns as well as a challenging harvest ahead in Ukraine. May Chicago SRW futures gained 23.5 cents to $11.20, May Kansas City HRW futures rose 30 cents to $11.84, and May MGEX spring wheat futures climbed 33.5 cents to $11.78.
Wheat export inspections moved slightly higher week-over-week to 15.9 million bushels. That was also toward the higher end of analyst estimates, which ranged between 11.0 million to 18.4 million bushels. Taiwan topped all destinations, with 2.1 million bushels. Cumulative totals for the 2021/22 marketing year are still trending moderately below last year’s pace, with 663.9 million bushels.
Ahead of the next crop progress report from USDA, analysts expect the agency to show winter wheat quality ratings to improve a point, with 33% rated in good-to-excellent condition through April 17. Spring wheat planting progress is expected to reach 9%.
Russia’s Sovecon consultancy now estimates the country’s April wheat exports will reach 69.8 million bushels, a month-over-month decline of 14%, if realized. Russia is the world’s No. 1 wheat exporter and its wheat shipments appear uninhibited for now even as it has waged war with Ukraine since late February.
To boost its domestic supplies, Bulgaria plans to purchase 27.6 million bushels of locally sourced milling wheat, along with 325,000 metric tons of sunflower seed. It’s a move to ensure food security amid the ongoing war in Ukraine.
The latest customs data shows China imported 112.1 million bushels of wheat during the first three months of 2022. That’s a 4.6% increase from last year’s pace so far. Sorghum purchases jumped 27% above year-ago totals, with 102.0 million bushels.
Last week, China auctioned off 20.2 million bushels of its state wheat reserves, which was 96.4% of the total available for sale, according to the National Grain Trade Center. China has offered a dozen similar sales earlier in 2022 as it attempts to tamp down high feed prices for local users.
Preliminary volume estimates were for 63,930 CBOT contracts, fading slightly below Thursday’s final count of 75,963.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
816.75
790.25
813.25
22
22-Jul
810
783.75
807
22.25
Soybeans
22-May
1720.5
1688.5
1714.75
32.75
22-Jul
1700
1669
1693.25
28.75
Soymeal $/ton
22-Jul
462.8
452.8
460.3
4.3
Soyoil cents/lb
22-Jul
78.5
77.31
78.09
1.18
Wheat $/bushel
22-May
1134.75
1098.25
1120.5
23.5
22-Jul
1143
1109.25
1128.75
23.75
KC Wheat
22-May
1193.5
1154
1185
30
22-Jul
1198
1160
1189
31.5
MPLS Wheat
22-May
1185.25
1139.75
1175
33.5
22-Jul
1188.75
1146.75
1178
36.25
Live Cattle cents/lb
22-Apr
140.975
140
140.35
-0.325
Feeder Cattle cents/lb
22-May
161.15
158.65
159.1
-2.675
Lean Hogs cents/lb
22-May
122.5
118.7
122.475
4
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-May
109.81
106
107.99
1.04
Diesel
22-May
3.9985
3.7928
3.9019
0.0471
Unleaded Gasoline $/gallon
22-May
3.4456
3.3317
3.3799
-0.0015
Natural Gas
22-Jun
8.197
7.488
7.895
0.472
U.S. Dollar Index
22-Jun
100.85
100.45
100.775
0.449
Gold $/ounce
22-May
2000
1972.5
1979.1
8.2
Copper
22-Apr
4.809
4.75
4.795
0.078
Fertilizer Swaps
(as of 04/15)
DAP Tampa-index
1,240.0
0
DAP-New Orleans
1,052.7
0
Urea-New Orleans
854.3
-33.07
Urea-Middle East
995.0
-125
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
-5.51
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