Morning report: Plus – what to expect from the Fed today and how yesterday’s inflation readings will impact interest rates. (Comments are updated by 7:30 a.m. Central Time.)
*Prices as of 6:50 am CST.
Corn
Corn prices eased $0.03-$0.05/bushel lower this morning as investor concerns about disruptions to Ukrainian shipping paces eased overnight. Bountiful rains and cooler-than-usual temperatures in Brazil this week are also weighing on both corn and soybean futures here in the U.S. as the prospects for Brazil’s 2022/23 corn and soybean harvest continue to improve.
Expect the grain markets today to show some price reaction to the Federal Reserve’s impending decision to raise interest rates. Otherwise, the markets are beginning to wind down for the holiday and there isn’t a lot of new news to report.
Interest rate decisions are not the only big market news that should be on corn growers’ minds today. The U.S. Energy Information Administration (EIA) updates its weekly Petroleum Inventory Status report today, which should provide key insights about ethanol production.
Last week’s report saw average daily ethanol production through the week ending December 2 accumulate to 1.077 million barrels/day (45.2M gallons/day) – the highest ethanol output volume for a given week in the past year.
That is a bullish sign for corn growers, who need the extra usage that ethanol can offer to the corn complex as forecasts for cattle production and export volumes continue to shrink. Energy production has eased in recent weeks and even though production has remained back at 2019 levels this year, stocks are tightening.
Plus, the recent cold snap expected across the country with this latest snow system could increase energy demand through the next week. That could be enough incentive to keep ethanol plants running strong through the holiday season. We will glean our latest insights in this morning’s report!
Soybeans
Soybean prices fell $0.05-$0.09/bushel this morning following rallies earlier this week. Favorable weather conditions in Brazil and recent rains in Argentina are driving the losses, but they are limited by expectations for hot and dry weather forecasts ahead for Argentina.
A 5.1-million-bushel daily flash sale from an unknown buyer reported by USDA yesterday kept demand hopes alive for U.S. soybeans overnight, which also helped stave off further losses in this morning’s trading session.
India has been booking aggressive purchases of palm oil imports over the past month as recent selloffs in the sunflower oil and soyoil markets have made palm oil purchases more affordable to Indian buyers. In fact, India’s palm oil imports in November 2022 surged 29% higher than the previous month thanks to weaker soyoil and sunoil prices.
Meanwhile, India, which is the world’s largest edible oil importer, saw its soyoil imports through November fall 31% from the previous month. Sunoil purchases from abroad dropped 9% during that time.
India’s buying spree has tightened global edible oil inventories. Palm oil futures inched up overnight after Malaysian palm inventories reported its first decrease in the past six months. The sentiments did not spill over into the soyoil complex, however, as Chicago soyoil futures edged slightly lower in the overnight trading session.
Wheat
U.S. wheat prices fell $0.08-$0.14/bushel this morning as worries about Ukraine’s export loading capacity eased following weekend port closures after Russian energy grid attacks in Ukraine. The dollar weakened in anticipation of today’s Federal Reserve interest rate hike, which is expected to be smaller than the previous four increases and helped limit further losses in the wheat market this morning.
Russia’s Interfax news agency reported this morning that the government is considering increasing its wheat export quota in the new year. Russia has implemented an export quota in the second half of its wheat marketing year (typically from January through June) in recent years to keep domestic wheat prices and availability stable.
Russian Agriculture Minister Dmitry Patrushev shared that the Russian government could increase the size of its export quota expected to go into effect in the coming months from the current volume of 937 million bushels.
USDA currently expects Russia to export 1.580 billion bushels of wheat through the entire 2022/23 marketing year. Russia’s overnight quotes about increasing the quota suggest that slow shipping speeds earlier in its marketing year could give Russia more shipping capacity in the early months of 2023.
European Union soft wheat exports were reported nearly 7% higher than the same time a year ago yesterday, reflecting the robust demand for E.U. wheat in the aftermath of the Ukrainian-Russian war. France’s farm office echoed that sentiment overnight, raising its forecast for 2022/23 wheat exports outside of the E.U. by 3% from last month to 378 million bushels.
Weather
Yesterday’s winter storm system brought up to a food of snow and strong winds to the Northern and Central Plains as well as severe thunderstorms and heavy rain to the Southern Plains and Southern Mississippi River Valley, according to NOAA’s short-term forecasts.
The system is currently pushing east into the Upper Midwest/Great Lakes Region, Eastern Corn Belt, and Southeast. Warmer temperatures could keep some of today’s moisture falling as a mixed wintry precipitation in these regions today, while more snow continues to hover over the Northern Plains.
Here on the Colorado Front Range, we were expected to receive anywhere between one inch to a foot of snow yesterday. We received no snow. Go figure.
NOAA’s 6-10-day forecasts are trending much cooler than usual for most of the continental U.S. through early next week. Chances for precipitation during that time are leaning above average for the Plains and Upper Midwest.
The temperature trends in the 8-10-day outlook will continue even cooler across the country by late next week. Chances for moisture are likely to remain slightly above to near normal for the Northern and Central Plains as well as the Upper Midwest during that time while the Eastern Corn Belt could see below average chances for precipitation.
Financials
The Federal Reserve concludes its two-day Federal Open Market Committee (FOMC) meeting today, after which it is likely to announce another round of interest rate hikes. Economists are projecting that the Fed will only increase rates by 0.5%, which marks the first time in the past four FOMC meetings that the Fed has shown any signs of slowing of interest rate increases as high inflationary pressures have persisted.
And speaking of inflation, we received some mostly good news about that yesterday. Consumer Price Index (CPI) data released by the Bureau of Labor Statistics through the month of November 2022 found that prices had increase 7.1% from last year. While that inflationary metric remains on the high side, it cooled down from a rate of 7.7% in October 2022.
The biggest contributors to easing inflation over the past month? Cheaper gas, utility expenses (not in my neighborhood – I just received a notice my water, gas, electric, and gas are all going up in the coming months), medical services, and used-car prices all helped push prices back into moderate territory over the past month.
Federal Reserve Chairman Jerome Powell will address the media following the FOMC meeting’s conclusion this afternoon. Yesterday’s CPI report is far from a guarantee that a smaller interest rate increase is in order today, but it is an encouraging sign that after four straight 0.75% increments of interest rate hikes that the Fed could view the economic landscape as being less tense than it was a couple months ago.
The market held its breath this morning as it awaits news of the latest interest rate increase. S&P 500 futures wavered between slight losses and gains this morning, inching 0.09% higher at last glance to $4,059.00 as the markets await the latest Fed decision.
What else I’m reading this morning on our website, FarmFutures.com:
Check out our December 2023 Farm Progress 365 series to start achieving your 2023 goals a little early.
Advance Trading’s Kent Stutzman explains why your marking plan should include options.
My latest E-corn-omics column takes a deep dive into all the recent happenings in the fertilizer markets.
Glad tidings for corn and soybeans could bring more good cheer for growers during January, writes Bryce Knorr.
Mike Downey tells the story of a “fair and equal” farm transition that did not accommodate for current market conditions and nearly bankrupted a fifth generation family farm.
Our team’s coverage of Friday’s December 2022 WASDE reports.
Morning Ag Commodity Prices – 12/14/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.4425
6.39
6.39
-0.0475
-0.74%
MAR ’23 CORN
$ / BSH
6.535
6.475
6.495
-0.04
-0.61%
MAY ’23 CORN
$ / BSH
6.535
6.4775
6.5
-0.035
-0.54%
JUL ’23 CORN
$ / BSH
6.485
6.4275
6.4475
-0.035
-0.54%
SEP ’23 CORN
$ / BSH
6.0975
6.05
6.055
-0.0375
-0.62%
DEC ’23 CORN
$ / BSH
5.965
5.925
5.935
-0.025
-0.42%
AR2 ’24 CORN
$ / BSH
6.045
6.0025
6.0025
-0.0325
-0.54%
AY2 ’24 CORN
$ / BSH
6.0575
6.0575
6.0575
-0.0075
-0.12%
JUL ’24 CORN
$ / BSH
6.025
6.025
6.025
-0.0275
-0.45%
JAN ’23 SOYBEANS
$ / BSH
14.7975
14.68
14.7275
-0.07
-0.47%
MAR ’23 SOYBEANS
$ / BSH
14.84
14.725
14.765
-0.08
-0.54%
MAY ’23 SOYBEANS
$ / BSH
14.88
14.7675
14.81
-0.0775
-0.52%
JUL ’23 SOYBEANS
$ / BSH
14.905
14.8
14.8475
-0.07
-0.47%
AUG ’23 SOYBEANS
$ / BSH
14.665
14.5875
14.625
-0.07
-0.48%
SEP ’23 SOYBEANS
$ / BSH
14.13
14.07
14.115
-0.055
-0.39%
NOV ’23 SOYBEANS
$ / BSH
13.905
13.83
13.865
-0.0525
-0.38%
AN2 ’24 SOYBEANS
$ / BSH
13.9425
13.8675
13.8725
-0.0825
-0.59%
AR2 ’24 SOYBEANS
$ / BSH
13.85
13.83
13.845
-0.0525
-0.38%
AY2 ’24 SOYBEANS
$ / BSH
13.8475
13.8
13.8
-0.0775
-0.56%
UL2 ’24 SOYBEANS
$ / BSH
13.845
#N/A
13.8975
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
46
#N/A
66.31
0
0.00%
JAN ’23 SOYBEAN OIL
$ / LB
64.27
63.34
63.68
-0.44
-0.69%
DEC ’22 SOY MEAL
$ / TON
0
#N/A
450
0
0.00%
JAN ’23 SOY MEAL
$ / TON
454.2
450.2
453.9
1.6
0.35%
MAR ’23 SOY MEAL
$ / TON
451.6
447.7
451.4
1.5
0.33%
MAY ’23 SOY MEAL
$ / TON
446.6
443.2
446.3
0.8
0.18%
JUL ’23 SOY MEAL
$ / TON
443
440.2
442.8
0.5
0.11%
DEC ’22 Chicago SRW
$ / BSH
7.1
#N/A
7.2875
0
0.00%
MAR ’23 Chicago SRW
$ / BSH
7.515
7.3775
7.4275
-0.08
-1.07%
MAY ’23 Chicago SRW
$ / BSH
7.62
7.485
7.535
-0.075
-0.99%
JUL ’23 Chicago SRW
$ / BSH
7.665
7.535
7.595
-0.0625
-0.82%
SEP ’23 Chicago SRW
$ / BSH
7.7275
7.61
7.6725
-0.05
-0.65%
DEC ’23 Chicago SRW
$ / BSH
7.8075
7.73
7.795
-0.0425
-0.54%
AR2 ’24 Chicago SRW
$ / BSH
7.8625
7.8275
7.8625
-0.035
-0.44%
DEC ’22 Kansas City HRW
$ / BSH
0
#N/A
8.83
0
0.00%
MAR ’23 Kansas City HRW
$ / BSH
8.66
8.505
8.5325
-0.12
-1.39%
MAY ’23 Kansas City HRW
$ / BSH
8.58
8.435
8.48
-0.095
-1.11%
JUL ’23 Kansas City HRW
$ / BSH
8.495
8.385
8.405
-0.0875
-1.03%
SEP ’23 Kansas City HRW
$ / BSH
8.5075
8.3925
8.415
-0.085
-1.00%
DEC ’23 Kansas City HRW
$ / BSH
8.525
8.43
8.4575
-0.0775
-0.91%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
8.4875
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
9.395
0
0.00%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.22
9.1225
9.1325
-0.095
-1.03%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.1675
9.1
9.11
-0.075
-0.82%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.075
9.075
9.075
-0.0675
-0.74%
SEP ’23 MLPS Spring Wheat
$ / BSH
8.905
8.905
8.905
-0.0825
-0.92%
DEC ’23 MLPS Spring Wheat
$ / BSH
8.9725
#N/A
9.015
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9
0
0.00%
DEC ’21 ICE Dollar Index
$
104.115
103.63
103.885
-0.058
-0.06%
JA ’21 Light Crude
$ / BBL
76.49
74.9
75.86
0.47
0.62%
FE ’21 Light Crude
$ / BBL
76.51
74.96
75.92
0.48
0.64%
JAN ’23 ULS Diesel
$ /U GAL
3.1732
3.082
3.1504
0.0582
1.88%
FEB ’23 ULS Diesel
$ /U GAL
3.1349
3.0458
3.1137
0.0543
1.77%
JAN ’23 Gasoline
$ /U GAL
2.1847
2.1477
2.1703
0.0094
0.44%
FEB ’23 Gasoline
$ /U GAL
2.197
2.1619
2.1867
0.0107
0.49%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
184.225
0
0.00%
MAR ’23 Feeder Cattle
$ / CWT
0
#N/A
185.725
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
154.9
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
156.35
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
82.4
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
84.575
0
0.00%
DEC ’22 Class III Milk
$ / CWT
20.48
#N/A
20.5
0
0.00%
JAN ’23 Class III Milk
$ / CWT
19.34
19.31
19.31
0.06
0.31%
FEB ’23 Class III Milk
$ / CWT
19.11
#N/A
19.21
0
0.00%
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