Afternoon report: Soybeans and wheat face double-digit losses in Thursday’s session
Grain prices were mixed but mostly lower on Thursday. Corn prices struggled but managed to move modestly higher by the close. Soybeans fell 0.8% on general demand concerns and expectations for a record-breaking Brazilian production this season. Wheat also trended lower today after a critical deal to keep Black Sea vessels safe was extended. Losses mostly ranged between 1.3% and 1.9%.
The eastern Corn Belt and the Great Lakes region should see some additional rain and/or snow between Friday and Monday, while areas farther west will remain dry, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts dry, warmer-than-normal conditions for large portions of the central U.S. between November 24 and November 30.
On Wall St., rumblings of a possible recession in the coming months pushed the Dow 40 points lower in afternoon trading to 35,512. “I’m looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there,” Kansas City Fed President Esther George told the Wall Street Journal yesterday.
Energy futures saw significant cuts. Crude oil dropped 4.5% to $81 per barrel on global demand concerns (particularly in China). Diesel dropped 2.5%, with gasoline down around 1.75%. The U.S. Dollar firmed moderately.
On Wednesday, commodity funds were net sellers of all major grain contracts, including corn (-2,000), soybeans (-11,000), soymeal (-2,000), soyoil (-8,000) and CBOT wheat (-5,000).
Corn
Corn prices shook off moderate overnight losses following some positive export data from USDA this morning but weren’t able to gain much positive momentum today, despite some net technical buying. December futures added 2.5 cents to $6.6775, with March futures up 1.25 cents to $6.6875.
Corn basis bids were steady to firm after improving 1 to 12 cents across four Midwestern locations on Thursday.
Corn export sales reached 46.0 million bushels last week. That was slightly on the higher end of trade estimates, which ranged between 27.6 million and 59.1 million bushels. Cumulative totals for the 2022/23 marketing year are still running moderately behind last year’s pace, with 195.5 million bushels.
Corn export shipments were more pedestrian after reaching 22.2 million bushels. Mexico accounted for nearly half of that total, with 10.4 million bushels. China, Japan, Colombia and Jamaica rounded out the top five.
The U.S. Environmental Protection agency reported today that the U.S. generated 1.24 billion ethanol blending credits, which was a modest improvement over September’s tally of 1.13 billion. The U.S. additionally generated 477 million biodiesel blending credits last month, down from September’s tally of 502 million.
Brazil’s Anec expects the country’s corn exports to reach 261.4 million bushels in November. That’s roughly 10% higher than the group’s last estimate made a week ago. Total corn exports for the first 11 months of the year are likely to reach 1.516 billion bushels, according to Anec.
Preliminary volume estimates were for 286,695 contracts, firming slightly above Wednesday’s final count of 273,100.
Soybeans
Soybean prices spilled 0.8% lower as traders attempted to balance a better-than-expected set of export data against waning Chinese demand and an expected record-breaking production in Brazil. January and March futures each declined 11.5 cents to close at $14.1775 and $14.2325, respectively.
Soybean basis bids were steady to firm after trending 5 to 20 cents higher at three Midwestern locations on Thursday.
Soybean export sales jumped to 111.3 million bushels last week. That was well above the entire range of trade estimates, which came in between 33.1 million and 66.1 million bushels. Cumulative totals for the 2022/23 marketing year are still moderately behind last year’s pace, with 535.9 million bushels.
Soybean export shipments were also strong, with 76.5 million bushels. China accounted for more than half of that total, with 48.1 million bushels. Germany, Mexico, South Korea and Taiwan filled out the top five.
As the 2022 crop season winds to a close, so will our regular feature “Feedback from the Field,” which is lovingly crafted and organized by Farm Futures grain market analyst Jaqueline Holland. “I am eternally grateful to you for providing the insights that helped other growers and market players understand how this year’s growing season progressed,” she says. Here’s your last chance to catch up on the latest farmer anecdotes and view the interactive map – click here to get started.
Brazil’s Anec expects the country’s November soybean exports to reach 84.5 million bushels, which is slightly below its prior estimate from a week ago. Soymeal exports are expected to reach 1.59 million metric tons this month.
Preliminary volume estimates were for 147,275 contracts, easing slightly below Wednesday’s final count of 151,964.
Wheat
Wheat prices eroded 1.3% to 1.9% lower after a critical Black Sea transportation deal was extended for another 120 days, which triggered plenty of technical selling on Thursday. December Chicago SRW futures fell 11 cents to $8.0650, December Kansas City HRW futures lost 18.5 cents to $9.37, and December MGEX spring wheat futures dropped 12.5 cents to $9.53.
Wheat export sales failed to impress after only reaching 10.7 million bushels. Analysts were generally expecting a bigger haul, with trade estimates ranging between
9.2 million and 20.2 million bushels. Cumulative totals for the 2022/23 marketing year are slightly behind last year’s pace, with 333.8 million bushels.
Wheat export shipments were even more pedestrian, with 4.4 million bushels. The Philippines topped all destinations, with 2.3 million bushels. Mexico, Colombia, the United Arab Emirates and Vietnam rounded out the top five.
Turkey’s President Erdogan issued a statement today thanking the United Nations, Russia and Ukraine for extending a current deal that allows for safe passage of cargo vessels in the Black Sea. The deal has led to more than 11 million metric tons of grain exports over the past four months, highlighting its importance to global food security, Erdogan noted. The deal was originally set to expire on November 19 but was extended by 120 days earlier today.
The International Grains Council slightly trimmed its estimates for 2022/23 global wheat production to 29.064 billion bushels. That’s primarily due to lower production potential in Argentina, which was partially offset by expected increases in Turkey and Australia.
Pakistan issued an international tender to purchase 18.4 million bushels of wheat from optional origins that closes on November 28. Additional details regarding shipment were not immediately available. Pakistan is in dire need of replenishing local grain supplies after suffering through catastrophic flooding earlier this year.
Earlier today, China sold 1.5 million bushels of its state reserves of imported wheat on auction, which was 100% of the amount available for sale. China has offered a handful of similarly sized auctions earlier this fall to boost local supplies.
Preliminary volume estimates were for 95,136 CBOT contracts, which was slightly below Wednesday’s final count of 106,977.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
668.25
654.75
667.5
2.5
23-Mar
669.5
657
669
1.25
Soybeans
23-Jan
1431.75
1406.75
1417
-11.5
23-Mar
1437.25
1412.75
1422.25
-11.5
Soymeal $/ton
23-Jan
405.2
400
402.5
-1.6
Soyoil cents/lb
23-Jan
72.4
69.55
70.22
-1.74
Wheat $/bushel
22-Dec
818.25
793.75
806.75
-11
23-Mar
837.25
814.5
825
-12.75
KC Wheat
22-Dec
955.5
933
938
-18.5
23-Mar
945.75
922.5
929
-18.25
MPLS Wheat
22-Dec
966
948
953.75
-12.5
23-Mar
975
956.5
962
-13.5
Live Cattle cents/lb
22-Dec
152.825
151.65
152.65
0.85
Feeder Cattle cents/lb
23-Jan
180.275
177.575
179.9
2.425
Lean Hogs cents/lb
23-Feb
91.35
89.475
90.975
0.625
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Dec
85.45
81.4
81.83
-3.76
Diesel
22-Dec
3.6292
3.4768
3.5228
-0.0908
Unleaded Gasoline $/gallon
22-Dec
2.5145
2.4357
2.4605
-0.0475
Natural Gas
23-Jan
6.912
6.554
6.73
0.123
U.S. Dollar Index
22-Dec
107.14
105.975
106.59
0.438
Gold $/ounce
22-Dec
1777.6
1756.6
1760
-13
Copper
22-Nov
3.696
3.69
3.69
-0.098
Fertilizer Swaps
(as of 11/11)
DAP Tampa-index
700.0
0
DAP-New Orleans
764.5
-26.46
Urea-New Orleans
583.1
-28.66
Urea-Middle East
587.5
-60
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
599.7
-14.88
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