Afternoon report: Prices firm (but barely) in Wednesday’s session; wheat also moves higher
Grain prices were mixed but mostly firm after some uneven technical maneuvering on Wednesday. Corn prices picked up modest gains after spending part of the morning in the red today. Wheat prices also made small inroads, while soybeans slumped more than 0.75% lower following a round of technical selling.
Not a lot of extra moisture is expected to fall on the central U.S. between Thursday and Friday, but the Central Plains and Great Lakes region are the areas most likely to gather as much as 0.25″ during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry weather to persist in the Northern Plains and upper Midwest between October 12 and October 18, with cooler-than-normal temperatures likely for much of the Corn Belt.
On Wall St., the Dow eased 41 points lower in afternoon trading to 30,270 after collecting steep gains earlier this week. Investors are ready for the next round of Q3 corporate earnings reports that will soon begin to be released. Energy futures were mixed but mostly firm. Crude oil improved by more than 1.25% to $87 per barrel on OPEC’s latest production cut announcement. Diesel climbed more than 4% higher, while gasoline dropped 0.5%. The U.S. Dollar firmed significantly.
On Tuesday, commodity funds were net buyers of corn (+4,000), soybeans (+5,000) and soyoil (+3,500) contracts but were net sellers of soymeal (-3,000) and CBOT wheat (-2,000).
Corn
Corn prices sputtered in a sometimes choppy session but managed to pick up small gains by the close thanks to light net technical buying on Wednesday. December futures picked up a penny to reach $6.84, while March futures added 1.25 cents to $6.9125.
Corn basis bids were steady to mixed, showing the most volatility at Midwestern ethanol plants on Wednesday after trending as much as 15 cents higher at one location while sinking as much as 10 cents lower at another location today.
Ethanol production made moderate improvements for the week ending September 30 but are still lackluster, with a daily average of 889,000 barrels. Production has failed to reach the 1-million-barrel-per-day benchmark since early August. Stocks trended 4% lower.
Prior to the next USDA grain export report, out Thursday morning and covering the week through September 29, analysts think the agency will show corn sales ranging between 13.8 million and 31.5 million bushels.
Using satellites and ground-based stations could offer a cheaper, more transparent way to monitor carbon removal, but is it accurate? Farm Futures executive editor Mike Wilson investigated the abilities of the latest breaking technologies – click here to learn more.
Brazil’s Anec estimates that the country’s corn exports will reach 165.7 million bushels in October. That would be more than double year-over-year results, if realized.
Mexico’s plans to phase out GMO corn use by 2024 could prove quite costly for U.S. farmers, who are the current No. 1 supplier of Mexico’s corn imports. A new study from World Perspectives Inc. suggests that the ban could lower U.S. corn prices by as much as 32%. Farm Futures policy editor Jacqui Fatka has more details on the unfolding situation – click here to learn more.
USDA expects China’s 2022/23 corn production to reach 10.629 billion bushels, which would be modestly lower than the prior season’s output due to lower planted area and excessive rains in the northeastern part of the country. That leaves the country’s import needs at an estimated 708.6 million bushels for the current marketing year.
Hungary is an important corn producer in the eastern European Union, but the country’s 2022 crop could plummet to just 118.1 million bushels (production typically ranges between 275.6 million and 354.3 million bushels) due to widespread drought. That means Hungary could become a net corn importer this marketing year.
Preliminary volume estimates were for 184,866 contracts, inching slightly below Tuesday’s final count of 187,556.
Soybeans
Soybean prices faded more than 0.75% lower amid seasonal harvest pressure in the U.S. coupled with a strengthening U.S. Dollar and Brazilian production that will likely rewrite the record books. November futures dropped 11.75 cents to $13.7175, with January futures down 11 cents to $13.8250.
Soybean basis bids were steady to mixed across the central U.S. on Wednesday after trending as much as 10 cents lower at an Indiana elevator while firming as much as 7 cents at an Indiana processor.
Prior to tomorrow morning’s USDA export report, analysts expect the agency to show soybean sales ranging between 18.4 million and 44.1 million bushels for the week ending September 29. Analysts are also anticipating soymeal sales ranging between 50,000 and 400,000 metric tons, plus up to 30,000 MT of soyoil sales.
Brazil’s Anec estimates that the country’s soybean exports will reach 114.3 million bushels in October, which would be slightly above year-ago results of 109.7 million bushels, if realized. Anec also estimates that Brazilian soymeal exports will reach 1.804 million metric tons this month.
Argentina’s 2021/22 soybean production reached 1.617 billion bushels, which was 4.3% below the prior year’s effort. Argentine farmers have already sold 69% of the new crop, which is slightly above last year’s pace of 67%. Future sales are expected to slow after a special exchange rate policy from the government has expired.
How are your crops looking this week? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can keep current with peer anecdotes from around the country.
The latest Ag Economy Barometer readings indicate farmers are clearly concerned about rising interest rates. Respondents to the survey indicated they are less likely to make farm machinery and building purchases in the near futures. Twenty-one percent said rising interest rates is the primary reason for pushing off new investments. Click here for more findings from the latest survey.
Preliminary volume estimates were for 184,492 contracts, shifting 13% below Tuesday’s final count of 211,397.
Wheat
Wheat prices found gains that mostly ranged between 0.2% and 0.7% after a round of technical buying on Wednesday. December Chicago SRW futures picked up 1.5 cents to $9.0450, December Kansas City HRW futures added 3 cents to $9.9175, and December MGEX spring wheat futures gained 6.5 cents to $9.8275.
Ahead of Thursday morning’s grain export report from USDA, analysts expect to see wheat sales ranging between 7.3 million and 16.5 million bushels for the week ending September 29.
Tunisia purchased 5.5 million bushels of soft wheat and 3.7 million bushels of durum wheat in an international tender that closed earlier today. Additional details concerning shipping and arrival dates were not immediately available.
Iraq received multiple offers in its tender to purchase 1.8 million bushels of wheat from optional origins. The lowest price submitted was sourced from Ukraine. All offers are still being considered at this time.
Preliminary volume estimates were for 62,364 CBOT contracts, which was moderately below Tuesday’s final tally of 80,959.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
687.5
675.75
684
1
23-Mar
694.25
683
691.25
1.25
Soybeans
22-Nov
1385.25
1362.5
1369.75
-11.75
23-Jan
1395.25
1373
1380.5
-11
Soymeal $/ton
22-Dec
404.7
396.5
398.5
-2.2
Soyoil cents/lb
22-Dec
65.77
64.19
65.54
0.66
Wheat $/bushel
22-Dec
919.75
894.25
902
1.5
23-Mar
931.75
907.5
915.25
2
KC Wheat
22-Dec
1008.75
980.25
990.25
3
23-Mar
1003.5
976
986.75
3
MPLS Wheat
22-Dec
994
968.5
981.5
6.5
23-Mar
1000
974.25
988.5
6.75
Live Cattle cents/lb
22-Oct
145.175
144.025
144.625
0.425
Feeder Cattle cents/lb
22-Oct
177.625
174.4
177.3
2.1
Lean Hogs cents/lb
22-Dec
76.75
74.1
76.55
2.125
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Nov
88.42
85.42
87.77
1.25
Diesel
22-Oct
3.7174
3.486
3.6838
0.148
Unleaded Gasoline $/gallon
22-Oct
2.7
2.5932
2.6607
-0.0223
Natural Gas
22-Nov
7.352
6.984
7.228
0.054
U.S. Dollar Index
22-Dec
111.655
109.985
111.07
1.089
Gold $/ounce
22-Nov
1729.7
1703.9
1714.1
-7
Copper
22-Oct
3.5345
3.5035
3.505
-0.013
Fertilizer Swaps
(as of 09/30)
DAP Tampa-index
725.0
-25
DAP-New Orleans
832.3
-8.27
Urea-New Orleans
680.7
-22.05
Urea-Middle East
767.5
-82.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
578.7
0
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