Morning report: Soybeans, wheat rise on calming economic outlooks. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 8-16 cents
Soybeans up 4-8 cents; Soymeal up $1.80/ton; Soyoil up $0.62/lb
Chicago wheat up 5-7 cents; Kansas City wheat up 3-5 cents; Minneapolis wheat up 1-4 cents
*Prices as of 6:55am CDT.
Good morning! Move over, Dead Sea! Tampa Bay is now the saltiest body of water on earth!
It was a late night in our household as we stayed up to watch my husband’s beloved Colorado Avalanche win the Stanley Cup for the first time in 21 years last night! What an amazing game to cap off a fantastic series! So, apologies for any missed market intel this morning. But GO AVS!!
Also – remember how sunflower acres rose this year – especially in North Dakota? I suspect this might have something to do with it.
I’m having serious FOMO this morning that we didn’t plant sunflowers in our backyard after I saw these for sale at my neighborhood grocery store on Friday evening, so I can’t imagine the feelings of regret corn growers must be having after this morning’s selloff!
Happy Monday everyone and have a good week!
Feedback from the Field updates! My latest FFTF column showcases growers’ increasing worries about heat stress, which was reflected in Tuesday’s weekly Crop Progress report from USDA.
“We had too much rain at the end of May,” explained a Central Kansas corn grower who reported local corn crops to be in fair condition. “Then it turned hot and dry due to a flash drought. Corn standing 3-4 feet is starting to tassel.”
Is heat stress a concern on your operation? 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 MyMap, so farmers can see others’ responses from across the country – or even across the county!
Corn
Corn prices fell $0.08-$0.14/bushel overnight as drought fears are gradually easing across the Midwest. Rains are expected to fall just ahead of peak pollination, which should help ensure favorable yield development over the next month.
“Weather conditions have eased a little,” Wang Xiaoyang, senior analyst with Sinolink Futures, told Reuters this morning. “Expectation of drought has weakened.”
Friday’s Cattle on Feed report from USDA had some bearish implications for corn markets. The June 1 cattle inventory reading pointed to 11.85 million head of cattle on feed. While that number was 1.2% higher than year-ago volumes, it came in far short of analyst expectations.
Pre-report trade estimates pegged Friday’s volume for June 1 cattle inventories 0.5%-1.9% higher than a year ago, ranging between 11.9 million – 12.1 million head with an average guess of 12.0 million head. So Friday’s report marked a fourth consecutive month of declining cattle herd numbers across the U.S.
This is not surprising, considering how high feed prices have been this year and the fact that persistent drought in the West and Plains has decimated a key pasture source for some of the largest cattle herds in the country. Lucrative cull prices have also thinned out the dairy herd, writes Kenny Burdine of the University of Kentucky.
The latter factor is a dynamic that has helped raise slaughter rates in 2022. May 2022 cattle sales for slaughter came in at 1.91 million head in Friday’s report. While that volume was lower than analyst expectations, it was still a 1.1% monthly increase in slaughtering rates which likely represents both the dairy dynamic at play in the cattle markets but also increased meat packing plant production to gear up for summer grilling season.
May 2022 cattle placements trended on the lower end of pre-report analyst guesses, coming in at 1.87 million head. The pre-report trade range was pegged at 1.86 million – 1.93 million head and average trade guess of 1.90 million head for May 2022. But that volume was still 3.3% higher than April 2022 placements, so that was a positive sign for future herd growth.
Remember, the cattle market is not likely to shift back into expansion mode until late 2023, at the earliest. Historically, cattle are the biggest consumers of corn but as the herd shrinks amid high feed costs and ethanol production and export paces continue to surge in the face of a smaller 2022 crop compared to last year, corn markets may not need bullish cattle data to continue its bullish price run.
Soybeans
Soybean prices rose $0.04-$0.08/bushel this morning despite larger than expected forecasts for the European Union’s rapeseed crop this summer, which is now forecast at 8% higher than the crop from a year ago.
Tight global oilseed supplies and stiff demand competition from the growing biofuels sector continue to have bullish impacts on prices. But this morning, a revival in the financial markets seemed to be the chief driver of higher soybean prices.
Higher palm oil prices on slow June exports from Malaysia added some strength to the global edible oils market this morning.
Markets are also worried that dry weather in Argentina could restrict global access to the world’s third-largest exporter of soybeans. Argentina already raised export taxes on soymeal and soyoil shipments following Russia’s invasion into Ukraine. Further safeguards to ensure domestic food availability and affordability could result in higher prices for the global oilseeds complex.
Wheat
Dry weather is causing planting delays for the Argentine winter wheat crop. Plus, fires and a heat wave during wheat harvest in North Africa is raising global demand prospects for wheat. Improving financial sector sentiments this morning also helped lift wheat futures $0.01-$0.06/bushel overnight.
Gains were capped by a stronger dollar and ongoing harvest progress in the Northern Hemipshere.
Weather
The heat wave looks to be over, according to NOAA’s short-range forecasts. Most of the Midwest and Plains will see temperatures dropping down into the 80s today with some highs anticipated in the 90s. Regardless, it is the first time in a couple weeks the forecast has shown more moderated temperatures, which will be favorable for crop development.
Mostly clear skies are forecast for the Heartland today through Wednesday. There is a chance for some scattered showers in the Northern Plains and Upper Midwest tonight, but any precipitation from those systems is likely to be very light.
NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are trending on the warm side for the Heartland during the first week of July. But both forecasts are showing above average chances for moisture during that time, which should help to advance crop development over the next couple weeks (and hopefully revive my yard!).
Financials
Stock futures advanced this morning, though gains are limited by ongoing concerns about Federal Reserve rate hikes and the increased likelihood for recession. S&P 500 futures rose 0.47% higher overnight to $3,934.75.
Weak economic data released over the past week (slowing retail spending, falling consumer confidence ratings, lower manufacturing activity) means that the country may be moving closer to a recession, which would hopefully lead the Federal Reserve to slow their interest rate hikes.
Wall Street has met the hikes with mixed reviews. While the hikes are necessary to curb inflation and revive consumer confidence in the economy (which is why we saw stock market rallies after the Fed increased rates after their last FOMC meeting), it also makes borrowing margin money to buy into the stock market – thus benefitting Wall Street – more expensive.
So take this morning’s gains with a grain of salt. Volatility is likely to remain the key theme in the stock markets over the next few weeks, so stay buckled in for a wild ride.
What else I’m reading this morning on our website, FarmFutures.com:
Naomi Blohm previews next week’s June 30 USDA Acreage and Quarterly Grain Stocks report, noting that amid historical stocks, next week’s report will likely set the price tone for the summer.
AgMarket.Net’s Bill Biedermann explains why cooler and wetter forecasts are tanking markets and how to prepare for potential upside.
A bearish turn on Wall Street has trickled over into the commodity space. Bryce Knorr analyzes the murky impacts of the stock market’s downturn on grain markets.
The 2023 ag spending bill has been advanced out of the House. Jacqui Fatka has the latest on what it means for U.S. producers.
Matthew Kruse analyzes how much heat corn can tolerate – and what that means for grain prices if the mercury stays high this summer.
Morning Ag Commodity Prices – 6/27/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.4625
7.33
7.4375
-0.065
-0.87%
SEP ’22 CORN
$ / BSH
6.7175
6.6125
6.695
-0.1325
-1.94%
DEC ’22 CORN
$ / BSH
6.6225
6.5125
6.6
-0.14
-2.08%
MAR ’23 CORN
$ / BSH
6.6725
6.57
6.6525
-0.14
-2.06%
MAY ’23 CORN
$ / BSH
6.6875
6.595
6.6825
-0.135
-1.98%
JUL ’23 CORN
$ / BSH
6.6625
6.555
6.6425
-0.1325
-1.96%
SEP ’23 CORN
$ / BSH
6.165
6.115
6.1625
-0.135
-2.14%
JUL ’22 SOYBEANS
$ / BSH
16.25
15.93
16.195
0.0875
0.54%
AUG ’22 SOYBEANS
$ / BSH
15.34
15.04
15.2775
0.07
0.46%
SEP ’22 SOYBEANS
$ / BSH
14.565
14.24
14.51
0.0525
0.36%
NOV ’22 SOYBEANS
$ / BSH
14.325
14.005
14.295
0.0525
0.37%
JAN ’23 SOYBEANS
$ / BSH
14.3675
14.05
14.335
0.0525
0.37%
MAR ’23 SOYBEANS
$ / BSH
14.31
14.0175
14.295
0.065
0.46%
MAY ’23 SOYBEANS
$ / BSH
14.3075
14.0175
14.29
0.0625
0.44%
JUL ’23 SOYBEANS
$ / BSH
14.27
14.0075
14.27
0.0675
0.48%
AUG ’23 SOYBEANS
$ / BSH
10.75
#N/A
13.9975
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
70.32
68.01
70.3
0.55
0.79%
AUG ’22 SOYBEAN OIL
$ / LB
67.93
65.14
67.81
0.88
1.31%
JUL ’22 SOY MEAL
$ / TON
441.1
429.5
437.2
4.6
1.06%
AUG ’22 SOY MEAL
$ / TON
416.3
408
413.4
2
0.49%
SEP ’22 SOY MEAL
$ / TON
401.3
393.7
399.2
1.9
0.48%
OCT ’22 SOY MEAL
$ / TON
393.2
385.4
391.1
1.7
0.44%
DEC ’22 SOY MEAL
$ / TON
394.5
385.7
392.4
1.7
0.44%
JUL ’22 Chicago SRW
$ / BSH
9.4
9.1375
9.3175
0.08
0.87%
SEP ’22 Chicago SRW
$ / BSH
9.5225
9.26
9.445
0.08
0.85%
DEC ’22 Chicago SRW
$ / BSH
9.685
9.42
9.5925
0.07
0.74%
MAR ’23 Chicago SRW
$ / BSH
9.78
9.535
9.6925
0.0725
0.75%
MAY ’23 Chicago SRW
$ / BSH
9.795
9.5625
9.73
0.0775
0.80%
JUL ’22 Kansas City HRW
$ / BSH
10.035
9.8025
9.975
0.05
0.50%
SEP ’22 Kansas City HRW
$ / BSH
10.0975
9.8525
10.0375
0.055
0.55%
DEC ’22 Kansas City HRW
$ / BSH
10.195
9.9525
10.1375
0.0575
0.57%
MAR ’23 Kansas City HRW
$ / BSH
10.24
10.0375
10.1625
0.0175
0.17%
MAY ’23 Kansas City HRW
$ / BSH
10.18
9.995
10.125
0.0375
0.37%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.775
10.61
10.725
0.0175
0.16%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.775
10.61
10.72
0.015
0.14%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.8375
10.6775
10.8175
0.055
0.51%
MAR ’23 MLPS Spring Wheat
$ / BSH
10.885
10.8
10.84
-0.035
-0.32%
MAY ’23 MLPS Spring Wheat
$ / BSH
10.96
10.91
10.91
0
0.00%
SEP ’21 ICE Dollar Index
$
103.9
103.565
103.8
-0.159
-0.15%
AU ’21 Light Crude
$ / BBL
108.35
105.6
108.03
0.41
0.38%
SE ’21 Light Crude
$ / BBL
105.21
102.48
104.9
0.45
0.43%
JUL ’22 ULS Diesel
$ /U GAL
4.3773
4.2971
4.344
-0.0189
-0.43%
AUG ’22 ULS Diesel
$ /U GAL
4.2585
4.178
4.2246
-0.0202
-0.48%
JUL ’22 Gasoline
$ /U GAL
3.9045
3.833
3.9007
0.0159
0.41%
AUG ’22 Gasoline
$ /U GAL
3.7984
3.7295
3.7947
0.013
0.34%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
172.5
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
175.075
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
135.35
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
133.375
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
110.925
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
106.775
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.33
#N/A
24.33
0
0.00%
JUL ’22 Class III Milk
$ / CWT
22.65
22.57
22.64
-0.14
-0.61%
AUG ’22 Class III Milk
$ / CWT
23.42
23.24
23.38
-0.12
-0.51%
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