Corn down 2-4 cents
Soybeans up 1-3cents; Soymeal up $1.00/ton; Soyoil up $0.79/lb
Chicago wheat up 12-14 cents; Kansas City wheat up 9-10 cents; Minneapolis wheat up 18-22 cents
*Prices as of 6:55am CDT.
Good morning! Our May/June 2022 print edition cover story was about the ongoing crisis in the Black Sea. Our online series, which has been updated to reflect current market conditions, will go live this week.
The four-part Black Swan in the Black Sea series will officially begin today and last through the rest of the week. We hope it helps you to better understand the new dynamics shaping agriculture, energy, and fertilizer markets.
The first article in the series examines the war’s impacts to the corn market. Ukrainian export shipments have resumed in the past two months, but at painfully slow paces. USDA expects only 54% of last year’s corn crop will be planted in Ukraine this spring, where sowing progress is already 20-30% behind last year’s paces due to wartime delays.
Russia continues to march towards Odessa, which would be a major loss for global corn markets if it is captured. Globally, supplies are tight and prices are high. High input costs this year and lucrative options for other crops have led growers away from corn acreage in 2022/23. The upcoming marketing year will likely feature another year of tight stocks and high prices.
Tomorrow’s installment will examine how wheat trade flows have shifted and could further shift due to the Black Sea conflict. It includes updated production information from the latest USDA-World Agricultural Supply and Demands Estimate report issued in early May on Ukrainian production and updated Russian export forecasts.
Feedback from the Field is ready for your responses! Corn and soybean plants are emerging almost as quickly as they were planted according to responses from growers in our latest Feedback from the Field column. Planting is progressing, but not as quickly as most growers would like.
Most notably, spring wheat producers across North Dakota are already weighing the possibility of prevent plant acreage as rain delays continue to mount. Little progress has been made and it could drastically alter USDA’s 2022 spring wheat production forecasts calculated from last week’s USDA all wheat and winter wheat projections.
Want to see how your farm’s progress stacks up against other growers across the country? Just click this link to take the survey and share updates about your farm’s spring 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!
Corn
Finally – a week of positive planting data! U.S. corn planting paces last week finally pulled within the five-year average, calming markets about delayed plantings, yield damage, and potential acreage loss in the corn market. Futures prices drifted $0.02-$0.04/bushel lower overnight on the optimism but were capped by ongoing planting delays in the Upper Midwest.
Crop Progress report data released by USDA yesterday afternoon painted an optimistic picture for U.S. corn planting progress. As of May 22, 72% of anticipated 2022 corn acres had been planted, a 23% increase from the previous week.
The five-year average is suddenly within striking range for the same time period, which stands at 79% complete. The most notable progress last week was made in the heart of the Corn Belt. The “I” states’ planting rates have largely fallen in line with their respective five-year averages, offering some production optimism for the season.
“This is likely to ease previous concerns that the delays to planting could lead to yield shortfalls or even a last-minute switch to soybeans,” Commerzbank observed to Reuters of the corn figures.
Yield concerns are still lingering over the corn complex, however. Planting progress continues to falter in the Upper Midwest, with notable delays continuing in this week’s report in North Dakota and Minnesota. Even with smaller corn acreages planned in both states (Minnesota was expected to lose the most corn acres this spring compared to last year of any other state in the country – 600,000 acres) this year, the two states are expected to combine for about 13% of the 2022 U.S. corn crop.
As Naomi Blohm points out in a recent Ag Marketing IQ column, much of the corn produced in that region is shipped via train out to the Pacific Northwest where it is sold onto the export market. A smaller crop will likely keep corn prices high on the export market while keeping shipping volumes low. That could create a more competitive buying environment for ethanol, processor, and livestock feeder end users over the coming year – good for farmers, but less favorable for consumers.
Emergence rates shot up 25% from the previous week to end the week of May 22 at 39%. The five-year average for the same period is 51%. Even with planting delays, hot and steamy weather in the Midwest over the past two weeks has helped speed up crop development.
Soybeans
Indonesia announced overnight yet another restructuring of its palm oil export restrictions, which paved the way for overnight rallies in the U.S. soybean and soyoil markets. Soybean futures prices rose $0.01-$0.03/bushel on the news, with a 1% gain in nearby soyoil futures prices leading the bulls in the soy market this morning.
Indonesia will remove a current subsidy applied to bulk cooking oil sales, replacing it with a price cap system to be taxed on raw materials sales at the local refinery level.
The Indonesia government continues to grapple with soaring domestic food inflation in an era of lucrative oilseed pricing on the international markets. A total export ban was briefly implemented a couple weeks ago before farmer protests led to the current state of reshuffling export policies.
Soybean planting progress accelerated by 20% last week to 50% planted as of May 22. That metric only stands 5% behind the five-year average – the same variance as last week’s report. Similar to corn, the Upper Midwest continues to hold back the nationwide average despite strong planting gains across the rest of the Heartland last week.
Emergence rates are nipping the heels of planters this week thanks to unseasonably warm weather across the country last week. Through May 22, 21% of the planted soybean crop had emerged, up 12% from the previous week and only 5% behind the five-year average for the same reporting period.
Wheat
Winter wheat condition ratings improved 1% on the week, according to yesterday’s Crop Progress report, rising to 28% good to excellent as weekend showers aided conditions in the parched Southern Plains.
Markets largely ignored the news this morning, with Chicago and Kansas City futures prices rising $0.07-$0.12/bushel on the news. With much of the crop in the Southern Plains already headed, as evidenced in last week’s Wheat Tour through Kansas, yields are largely set and point to crop shortfalls for hard red winter wheat this year.
“It’s pretty clear that the U.S. wheat crop won’t be unscratched. Weather will dent yields there like other countries,” a New Delhi-based dealer with a global trading firm told Reuters this morning.
Spring wheat planting only advanced 10% last week, landing at 49% complete as of May 22. Planting progress in top states Minnesota and North Dakota continues to fall behind due to weather challenges. As prevent plant dates approach, Minneapolis futures traded $0.17-$0.20/bushel higher this morning on fears that the acreage will be soon diverted into other crops.
The European Union also cut wheat yields for the bloc as dry weather over the past month has stunted crop development. The E.U.’s crop monitoring service, MARS, now forecasts a 1% drop in 2022 European soft wheat yields, leaving them at 87.6 bushels per acre. That’s a 2.5% decrease from 2021 yields but still 0.9% higher than the five-year average yield.
The E.U. is the world’s second largest wheat exporter, with volumes expected to increase in the upcoming marketing year due to logistical issues with Ukraine and Russian crops amid the ongoing Black Sea conflict. The yield downgrade contributed significantly to higher prices in the U.S. wheat complex this morning.
Weather
Temperatures will warm into the 60s-70s today across much of the Heartland, according to NOAA’s short-range forecasts. Mostly clear skies are forecast today for North Dakota and Northern Minnesota, which should help to coax along planting progress in the region.
Elsewhere in the Heartland today, a storm system currently hovering over the Southern Plains will shift northeast into the Central Mississippi River Valley late this evening and will spend the next few days lingering over the Corn Belt. One to three inches of rain is expected to fall over the next 24 hours from Western Iowa and Eastern Nebraska, down to Southeast Texas.
That will likely slow planting progress in the top corn-producing states, but it will enable clear skies in the Northern Plains, which could help that region catch up with national sowing rate averages this week.
NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are trending wetter for much of the Heartland.
Financials
Despite an optimistic two-day rally, S&P 500 futures dipped 1.01% this morning to $3,931.50 – back into bear market territory on a tech stock selloff overnight. Asian and European stocks both posted overnight losses to tech stocks, paving the way for this morning’s losses at home.
“We’re going to have this rollercoaster ride for some time, as investors cling onto more optimistic data points and get fresh disappointment when there’s another downbeat reading coming through,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told the Wall Street Journal this morning. “We don’t yet know the full path of interest-rate rises or how resilient consumers will be.”
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr is calling it – weather markets are here and bringing price rallies for growers.
Kansas Farmer editor Jennifer Latzke shares the big takeaways from the 2022 Winter Wheat Tour last week.
Roger Wright explains what happens when a put option has no potential value. Naomi Blohm breaks down the impact of slow planting paces in the Upper Midwest on future production and usage rates.
Blohm calculates that planting progress for 13% of the 2022 corn crop is “exceptionally” delayed and that Pacific Northwest exports may be at highest risk.
Davon Cook has tips to use empirical methods to evaluate your relationship with your farm partners.
Morning Ag Commodity Prices – 5/24/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.87
7.8
7.84
-0.0225
-0.29%
SEP ’22 CORN
$ / BSH
7.5475
7.4725
7.525
-0.0225
-0.30%
DEC ’22 CORN
$ / BSH
7.3775
7.305
7.36
-0.03
-0.41%
MAR ’23 CORN
$ / BSH
7.405
7.3375
7.395
-0.025
-0.34%
MAY ’23 CORN
$ / BSH
7.395
7.3475
7.385
-0.0225
-0.30%
JUL ’23 CORN
$ / BSH
7.3325
7.2825
7.33
-0.02
-0.27%
SEP ’23 CORN
$ / BSH
6.705
6.665
6.705
-0.02
-0.30%
JUL ’22 SOYBEANS
$ / BSH
16.94
16.75
16.9025
0.0325
0.19%
AUG ’22 SOYBEANS
$ / BSH
16.3475
16.18
16.3275
0.04
0.25%
SEP ’22 SOYBEANS
$ / BSH
15.6325
15.4875
15.6125
0.0275
0.18%
NOV ’22 SOYBEANS
$ / BSH
15.2225
15.0875
15.2075
0.02
0.13%
JAN ’23 SOYBEANS
$ / BSH
15.25
15.1225
15.2425
0.0225
0.15%
MAR ’23 SOYBEANS
$ / BSH
15.165
15.0475
15.16
0.025
0.17%
MAY ’23 SOYBEANS
$ / BSH
15.1575
15.04
15.1525
0.0225
0.15%
JUL ’23 SOYBEANS
$ / BSH
15.14
15.05
15.14
0.025
0.17%
AUG ’23 SOYBEANS
$ / BSH
0
#N/A
14.9025
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
81.49
79.9
81.18
0.71
0.88%
AUG ’22 SOYBEAN OIL
$ / LB
78.77
77.43
78.5
0.54
0.69%
JUL ’22 SOY MEAL
$ / TON
426
420.3
424.6
2.1
0.50%
AUG ’22 SOY MEAL
$ / TON
420.5
415.7
419.5
1.4
0.33%
SEP ’22 SOY MEAL
$ / TON
413.4
410
412.5
0.2
0.05%
OCT ’22 SOY MEAL
$ / TON
406.3
403.5
405.1
-0.8
-0.20%
DEC ’22 SOY MEAL
$ / TON
407.1
404
406
-0.7
-0.17%
JUL ’22 Chicago SRW
$ / BSH
12.0875
11.855
12.045
0.145
1.22%
SEP ’22 Chicago SRW
$ / BSH
12.16
11.9325
12.125
0.15
1.25%
DEC ’22 Chicago SRW
$ / BSH
12.22
12.005
12.1875
0.15
1.25%
MAR ’23 Chicago SRW
$ / BSH
12.225
12.02
12.1925
0.1425
1.18%
MAY ’23 Chicago SRW
$ / BSH
12.06
11.8975
12.035
0.125
1.05%
JUL ’22 Kansas City HRW
$ / BSH
12.915
12.745
12.87
0.105
0.82%
SEP ’22 Kansas City HRW
$ / BSH
12.9525
12.7925
12.9125
0.1075
0.84%
DEC ’22 Kansas City HRW
$ / BSH
12.9875
12.835
12.9525
0.105
0.82%
MAR ’23 Kansas City HRW
$ / BSH
12.98
12.825
12.93
0.0925
0.72%
MAY ’23 Kansas City HRW
$ / BSH
12.7025
12.6175
12.6175
0.0425
0.34%
JUL ’22 MLPS Spring Wheat
$ / BSH
13.1975
13.04
13.1975
0.2125
1.64%
SEP ’22 MLPS Spring Wheat
$ / BSH
13.1775
13.045
13.1425
0.1675
1.29%
DEC ’22 MLPS Spring Wheat
$ / BSH
13.115
13
13.115
0.18
1.39%
MAR ’23 MLPS Spring Wheat
$ / BSH
13.08
13.0425
13.08
0.16
1.24%
MAY ’23 MLPS Spring Wheat
$ / BSH
13.0175
#N/A
12.8725
0
0.00%
JUN ’21 ICE Dollar Index
$
102.335
101.755
101.935
-0.162
-0.16%
JU ’21 Light Crude
$ / BBL
110.88
108.61
110.62
0.33
0.30%
AU ’21 Light Crude
$ / BBL
108.11
105.94
107.85
0.31
0.29%
JUN ’22 ULS Diesel
$ /U GAL
3.8315
3.7031
3.821
0.0522
1.39%
JUL ’22 ULS Diesel
$ /U GAL
3.7053
3.5765
3.6966
0.0532
1.46%
JUN ’22 Gasoline
$ /U GAL
3.716
3.6278
3.6837
-0.114
-3.00%
JUL ’22 Gasoline
$ /U GAL
3.6244
3.537
3.6021
-0.0781
-2.12%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
153.45
0
0.00%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
165.625
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
132.775
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
132.975
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
110.375
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
110.85
0
0.00%
MAY ’22 Class III Milk
$ / CWT
25.07
25.07
25.07
-0.02
-0.08%
JUN ’22 Class III Milk
$ / CWT
24.29
24.26
24.26
-0.21
-0.86%
JUL ’22 Class III Milk
$ / CWT
24.49
24.48
24.48
-0.2
-0.81%
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Morning report: Domestic and global wheat yield concerns send Chicago wheat above $12/bushel benchmark. (Comments are updated by 7:30 a.m. Central Time.)
