Afternoon report: Traders finalize positions ahead of tomorrow’s WASDE report, sending grains and oilseeds lower
Happy Election Day! If you haven’t made it out to the polls or mailed in your ballot yet, please put this newsletter down and get out and vote! And then continue reading, of course!
Feedback from the Field updates – last weeks of the season! How is harvest progressing on your farm this fall?! Click this link to take the survey and share updates about your farm’s harvest 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!
My latest FFTF column is live on our site! Soybean harvest is rapidly coming to a close across the country and more and more FFTF respondents are reporting corn harvest as complete.
Responses are starting to slow as many growers are wrapping up for the year, so our time together in FFTF this growing season will also come to an end in the upcoming weeks. So be sure to drop any insights you’d like to share with us from the 2022 season at this link and I will share them on our map as well as in my columns as harvest season winds down. Thanks! -JH
USDA Baseline Projections
In this morning’s report, I wrote an analysis about USDA’s Baseline Projections report released by the World Ag Outlook Board yesterday. That analysis has now been published in my latest E-corn-omics column – give it a read if you missed my report this morning!
Corn
It was a largely uneventful trading session today, with many investors finalizing positions ahead of tomorrow’s November 2022 WASDE reports from USDA. As a result, corn prices drifted $0.04-$0.09/bushel lower and flirted with a six-week low today. Markets are bracing for smaller 2022 U.S. production figures in tomorrow’s report but larger ending stocks as usage targets (demand signals) are expected to be cut.
Cash prices again closed mixed at elevator locations in the Eastern Corn Belt. Basis remains positive at Western Corn Belt elevators and ethanol plants but negative in their eastern counterparts. Basis grew at ethanol plants across the Corn Belt. Cash bids at processors was also mixed today though the bids are largely quoted at a premium to Dec22 futures. Cash prices at export terminals were weaker to flat today as cash quotes continue to trade at a steep discount to futures.
Yesterday’s Crop Progress report found 87% of U.S. corn acres had been harvested as of November 7. That marked an 11% increase from the previous week and is also 11% ahead of the five-year average. Markets were expecting an average completion rate of 86%, which marks one of the only times this growing season that the analysts have underestimated the weekly harvest figure from USDA.
Soybeans
Soybean prices edged $0.03-$0.07/bushel lower during today’s trading session as profit-taking continued after prices notched a six-week high during yesterday’s trading session and traders liquidated long positions in advance of tomorrow’s USDA reports.
Markets are expecting slightly better yield prospects for the 2022 U.S. crop in tomorrow’s report and larger ending stocks amid lackluster exporting paces due to low water levels on the Mississippi River.
Losses were limited during today’s trading session thanks to USDA reporting three large daily flash export sales this morning. China ordered 5.1 million bushels, Mexico snapped up 5.3 million bushels, and unknown buyers booked 4.8 million bushels of U.S. soybeans this morning.
Cash soybean prices rose at an Eastern Corn Belt ethanol plant and elevator today. Cash prices for soybeans at elevator and river terminals destined for the U.S. Gulf continue to be quoted at steep discounts to January 2023 futures prices. Processors are largely offering cash bids at or above futures prices, offering growers with surplus harvested supplies a profitable option for cash sales.
USDA’s Crop Progress report issued yesterday found 94% of U.S. soybeans harvested as of last Sunday, which was perfectly aligned with pre-report trade estimates. Soybean harvest progress increased 6% from the previous week and held an 8-point advantage over the five-year benchmark for the same reporting period.
Wheat
U.S. wheat futures fell $0.07-$0.17/bushel today on expectations of continued Ukrainian grain exports and traders expecting USDA to report larger U.S. wheat ending stocks in tomorrow’s WASDE reports amid low export volumes.
Both cash markets for hard red winter wheat in the Southern Plains and soft red winter wheat in the Eastern Corn Belt were flat during today’s trading session. With futures prices dipping below recent highs, farmers had little incentive to book new cash sales during the market session today.
European wheat futures fell to a seven-week low today as expectations persisted that Ukrainian shipping corridors would remain open for the foreseeable future. European wheat exports, which were initially the market’s supplier of choice when Northern Hemisphere crops were harvested this summer, are now more expensive than the behemoth Russian crop despite Western sanctions complicating Russian export transactions.
“Russian wheat is looking the cheapest large-volume seller in the world export markets currently,” a German trader told Reuters today. “Russia has a big crop to dispose of and is likely to remain an aggressive seller in coming months, which could cost the EU export business.”
In two international wheat tenders issued by top international buyer, Egypt, and Algeria yesterday, Russia was the lowest bidder. Egypt’s state grain buying agency, GASC, cancelled the tender shortly after its announcement yesterday after transportation costs rendered the Russian grain unaffordable. But the Algerian tender was accepted.
Ukrainian President Volodymyr Zelenskiy called on the U.N. to extend the “Black Sea Grains Initiative,” which expires on Saturday, November 19. “We maintain the line that the initiative must continue regardless of whether the Russian Federation is willing,” Zelenskiy said.
Market analysts had been hoping for improving winter wheat crop conditions ahead of yesterday’s Crop Progress report after last week’s showers and USDA did not disappoint. The pre-report trade guess averaged 31% good to excellent. While USDA’s figure found a 2-point condition improvement on the week, the 30% good to excellent rating for winter wheat conditions fell just shy of the pre-report average trade guess.
But the rains did help improve growing conditions for the young crop. Emergence rates rose 11% on the week to 73% complete. That figure has consistently trailed the five-year average all fall, but yesterday the mark moved within 1% of the benchmark – the closest it has been all season. To be sure, drought still remains a very prominent concern for this winter wheat crop in the Southern Plains, but last week’s showers brought some long-awaited relief to dire conditions.
Weather
Some scattered showers will be expected in the Central and Northern Plains today, according to NOAA’s short-term forecasts. More widespread showers will develop over the Upper Midwest later this evening. Minnesota, Wisconsin, and Oklahoma could see up to three quarters of an inch of accumulation over the next 24 hours as a result.
NOAA’s 6-10-day forecasts are now trending cooler than normal for the middle of the month across most of the country. Chances for rain will be below normal in the Midwest and Northern Plains, though the Central and Southern Plains are likely to see a near normal to above average change of precipitation during that tie.
Those trends will begin to shift slightly in the 8-10-day outlook. Forecasts during that time are still cool but not quite as chilly as in the 6-10-day forecast. The chances for excessive dryness in the Upper Midwest during that time will extend into the Central Plains.
Financials
The S&P 500 was on track to close 0.56% higher to $3,828.11 today as markets remained focused on optimism that today’s election results will stall any sort of major legislative upheaval in Washington, D.C. over the next two years.
What else I’m reading this morning on our website, FarmFutures.com:
USDA is calling for more corn acreage in 2023 in its latest Baseline Projections to 2023 report.
Corn, wheat, and money are still playing ball. Bryce Knorr lists three fundamentals to watch to make sure you aren’t missing out on the game.
Advance Trading’s JJ Keske thinks it’s not too early to start thinking about 2023 sales.
Shrinking diesel stockpiles and seasonal demand jumps are putting a strain on farmers’ pocketbooks.
Water Street Solutions’ Darren Frye offers three approaches to solve your farm’s toughest problems.
Closing Ag Commodity Prices – 11/8/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.77
6.6625
6.6675
-0.09
-1.33%
MAR ’23 CORN
$ / BSH
6.8275
6.7225
6.73
-0.085
-1.25%
MAY ’23 CORN
$ / BSH
6.83
6.7275
6.735
-0.085
-1.25%
JUL ’23 CORN
$ / BSH
6.78
6.6875
6.6925
-0.08
-1.18%
SEP ’23 CORN
$ / BSH
6.38
6.3075
6.3125
-0.055
-0.86%
DEC ’23 CORN
$ / BSH
6.2475
6.1825
6.1925
-0.0425
-0.68%
AR2 ’24 CORN
$ / BSH
6.31
6.26
6.2625
-0.04
-0.63%
AY2 ’24 CORN
$ / BSH
6.3
6.3
6.2875
-0.0375
-0.40%
JUL ’24 CORN
$ / BSH
6.3
6.255
6.2575
-0.04
-0.67%
NOV ’22 SOYBEANS
$ / BSH
14.46
14.36
14.45
0.05
0.35%
JAN ’23 SOYBEANS
$ / BSH
14.54
14.405
14.47
-0.0325
-0.22%
MAR ’23 SOYBEANS
$ / BSH
14.61
14.485
14.5375
-0.0425
-0.29%
MAY ’23 SOYBEANS
$ / BSH
14.6775
14.5575
14.6025
-0.0525
-0.36%
JUL ’23 SOYBEANS
$ / BSH
14.7
14.585
14.615
-0.0675
-0.46%
AUG ’23 SOYBEANS
$ / BSH
14.53
14.43
14.4475
-0.055
-0.38%
SEP ’23 SOYBEANS
$ / BSH
14.1425
14.045
14.0675
-0.045
-0.32%
NOV ’23 SOYBEANS
$ / BSH
13.96
13.8625
13.8775
-0.04
-0.29%
AN2 ’24 SOYBEANS
$ / BSH
13.965
13.89
13.9025
-0.035
-0.23%
AR2 ’24 SOYBEANS
$ / BSH
13.88
13.8325
13.815
-0.0375
-0.14%
AY2 ’24 SOYBEANS
$ / BSH
13.785
13.775
13.7675
-0.0375
-0.22%
DEC ’22 SOYBEAN OIL
$ / LB
76.88
74.85
75.03
-1.3
-1.70%
JAN ’23 SOYBEAN OIL
$ / LB
74.25
72.51
72.68
-1.22
-1.65%
DEC ’22 SOY MEAL
$ / TON
422.9
417.2
419.8
0.8
0.19%
JAN ’23 SOY MEAL
$ / TON
416.2
411.2
413.8
0.9
0.22%
MAR ’23 SOY MEAL
$ / TON
408.4
402.9
406.1
1.8
0.45%
MAY ’23 SOY MEAL
$ / TON
404.2
398.9
402
1.9
0.47%
JUL ’23 SOY MEAL
$ / TON
403.4
397.9
401
1.9
0.48%
DEC ’22 Chicago SRW
$ / BSH
8.55
8.2475
8.285
-0.1725
-2.04%
MAR ’23 Chicago SRW
$ / BSH
8.725
8.4425
8.48
-0.16
-1.85%
MAY ’23 Chicago SRW
$ / BSH
8.82
8.545
8.5825
-0.16
-1.83%
JUL ’23 Chicago SRW
$ / BSH
8.86
8.585
8.6325
-0.1575
-1.79%
SEP ’23 Chicago SRW
$ / BSH
8.9175
8.66
8.71
-0.145
-1.64%
DEC ’23 Chicago SRW
$ / BSH
8.99
8.7425
8.7875
-0.145
-1.62%
AR2 ’24 Chicago SRW
$ / BSH
8.9925
8.805
8.805
-0.1425
-1.59%
DEC ’22 Kansas City HRW
$ / BSH
9.71
9.4275
9.47
-0.1025
-1.07%
MAR ’23 Kansas City HRW
$ / BSH
9.665
9.3925
9.4275
-0.11
-1.15%
MAY ’23 Kansas City HRW
$ / BSH
9.62
9.355
9.385
-0.1175
-1.24%
JUL ’23 Kansas City HRW
$ / BSH
9.54
9.2825
9.31
-0.125
-1.32%
SEP ’23 Kansas City HRW
$ / BSH
9.5125
9.2575
9.285
-0.1325
-1.41%
DEC ’23 Kansas City HRW
$ / BSH
9.53
9.2875
9.295
-0.155
-1.64%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.3975
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.7275
9.49
9.5275
-0.075
-0.78%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.84
9.62
9.65
-0.0725
-0.75%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.8825
9.69
9.7075
-0.0775
-0.79%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.88
9.6825
9.6825
-0.09
-0.92%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.69
9.4625
9.48
-0.0625
-0.65%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.705
9.5375
9.5375
-0.01
-0.10%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.5725
0
0.00%
DEC ’21 ICE Dollar Index
$
110.5
109.24
109.53
-0.463
-0.42%
DE ’21 Light Crude
$ / BBL
92.17
88.66
89.14
-2.65
-2.89%
JA ’21 Light Crude
$ / BBL
91.1
87.76
88.22
-2.51
-2.77%
DEC ’22 ULS Diesel
$ /U GAL
3.9019
3.7395
3.771
-0.0101
-0.27%
JAN ’23 ULS Diesel
$ /U GAL
3.697
3.5808
3.5925
-0.022
-0.61%
DEC ’22 Gasoline
$ /U GAL
2.6991
2.6226
2.6365
-0.0166
-0.63%
JAN ’23 Gasoline
$ /U GAL
2.6234
2.5574
2.5657
-0.0266
-1.03%
NOV ’22 Feeder Cattle
$ / CWT
178.625
177.725
178.25
0.025
0.01%
JAN ’23 Feeder Cattle
$ / CWT
180.225
178.925
179.85
-0.075
-0.04%
DE ’21 Live Cattle
$ / CWT
153.25
152.6
152.95
-0.1
-0.07%
FE ’21 Live Cattle
$ / CWT
155.15
154.45
154.725
-0.3
-0.19%
DEC ’22 Live Hogs
$ / CWT
87.05
84.825
85.5
-1.55
-1.78%
FEB ’23 Live Hogs
$ / CWT
89.3
87.5
88.4
-0.65
-0.73%
NOV ’22 Class III Milk
$ / CWT
20.93
20.78
20.9
0
0.00%
DEC ’22 Class III Milk
$ / CWT
21.05
20.3
20.9
0.43
2.10%
JAN ’23 Class III Milk
$ / CWT
20.16
19.44
20.14
0.41
2.08%
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