Afternoon report: Wheat prices continue to plummet for third consecutive session.
Grain prices were mixed amid some uneven technical maneuvering today. Corn and soybeans grabbed double-digit gains on a round of technical buying largely triggered by export optimism from yesterday’s World Agricultural Supply and Demand Estimates (WASDE) report and the agency’s weekly export sales report, released early this morning. Wheat prices swung sharply lower, in contrast, with some contracts losing almost 10% by the close as that commodity continues to exhibit extreme volatility.
Starting today, snow showers will fall in a band stretching from Arizona all the way through northwest Ohio, delivering between 1 to 4 inches along the way. Further out, NOAA’s 8-to-14-day outlook predicts a return to seasonally dry conditions for the Central and Southern Plains, with warmer-than-normal weather likely for most of the United States between Marc 17 and March 23.
There’s still ample volatility on Wall St., with the Dow dropping 168 points in afternoon trading to 33,117. Investors remain skittish, especially as high-level negotiations between Russia and Ukraine have made little headway so far. Energy futures continued to fade lower, with crude oil down 2.5% this afternoon to $106 per barrel. Diesel dropped 5%, with gasoline down around 1.5%. The U.S. Dollar firmed moderately.
On Wednesday, commodity funds were net buyers of soymeal (+2,000) contracts but were net sellers of corn (-20,000), soybeans (-10,000), soyoil (-4,000) and CBOT wheat (-16,000).
NOTE: Farm Futures is conducting its March 2022 survey to project acreage estimates ahead of USDA’s March 31 Prospective Plantings report. We will release the survey results ahead of USDA’s numbers to help you adjust your grain marketing plans accordingly. Click here to take our survey – as thanks, you’ll be entered for a chance to win one of five $50 Amazon gift cards.
Corn
Corn prices climbed 3% higher on Thursday, with traders remaining upbeat about yesterday’s WASDE data and a better-than-expected round of export data out this morning. March futures rose 24.75 cents to $7.5975, with May futures up 21.75 cents to $7.5475.
Corn basis bids were steady to mixed across multiple Midwestern locations on Thursday, trending as much as 5 cents in either direction today.
Old crop corn sales reached 84.4 million bushels, with new crop sales adding around 900,000 bushels for a total of 85.3 million bushels for the week ending March 3. That was above the entire range of trade guesses prior to today’s report, which came in between 21.7 million and 74.8 million bushels. Cumulative totals for the 2021/22 marketing year hold a slim disadvantage to last year’s pace, reaching 1.084 billion bushels.
Corn export shipments improved 14% from the prior four-week average, with 69.4 million bushels. China was the No. 1 destination, with 21.9 million bushels.
Brazil’s Conab is now estimating the country’s 2021/22 corn production will come in around 4.423 billion bushels, which is fractionally lower than its prior projection. That’s also a bit lower than USDA’s latest estimate of 4.488 billion bushels.
In Argentina, the Rosario grains exchange slightly reduced its estimates for 2021/22 corn production, offering a new projection of 1.878 billion bushels. The country has struggled with drought throughout much of this season, although recent rains have proved somewhat helpful.
There has been a lot of market-moving news swirling around in recent sessions, from the ongoing Russian invasion of Ukraine, lingering concerns about South America’s production potential, USDA’s latest WASDE report and much more. Bill Biedermann, hedging strategist with AgMarket.Net, walks through five key market fundamentals you should be paying attention to right now in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 282,665 contracts, tracking 10% higher than Wednesday’s final count of 255,929.
Soybeans
Soybean prices fought through a choppy session Thursday, settling around 0.8% higher after a round of technical buying largely spurred by optimism over U.S. exports and questions about South America’s production potential this embattled season. March and May futures each rose 13.5 cents to close at $17.00 and $16.8525, respectively.
Soybean basis bids were mostly steady on Thursday but did shift 4 cents higher at an Illinois river terminal while eroding 15 cents lower at an Iowa river terminal today.
Old crop soybean sales jumped 76% above the prior four-week average to 81.0 million bushels. New crop sales contributed another 32.9 million bushels for a total tally of 113.9 million bushels last week. That total was on the upper end of trade estimates, which ranged between 66.1 million and 117.6 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately behind last year’s pace, however, with 1.529 billion bushels.
Soybean export shipments improved 11% week-over-week but remained 26% below the prior four-week average, with 30.7 million bushels. China was the No. 1 destination, with 11.2 million bushels.
Brazil’s Conab estimates that the country’s 2021/22 soybean production will only reach 4.511 billion bushels. That’s a 2.2% reduction from its prior estimate as the country has dealt with widespread drought for much of the season.
Argentina’s Rosario grains exchange slightly reduced its estimates for the country’s 2021/22 soybean production, which fell to 1.470 billion bushels. That’s moderately below the latest USDA estimates from the agency’s March WASDE report, which offered a projection of 1.598 billion bushels. Harvest will begin in a few weeks.
Preliminary volume estimates were for 182,774 contracts, inching slightly below Wednesday’s final count of 187,440.
Wheat
Wheat prices are increasingly seen as “too expensive” by some overseas buyers after jumping to historically high levels last week. Today marks the third consecutive session that prices suffered a major setback. May Chicago SRW futures tumbled 119.25 cents to $10.8225, May Kansas City HRW futures lost 52.25 cents to $10.6225, and May MGEX spring wheat futures faded 33.75 cents to $10.5025.
Old crop wheat exports improved 21% from the prior four-week average, with 11.3 million bushels. New crop sales added 2.3 million bushels, bringing total sales to 13.6 million bushels. That was toward the lower end of analyst estimates, which came in between 9.2 million and 25.7 million bushels. Cumulative totals for the 2021/22 marketing year are now at 533.9 million bushels and remain moderately behind last year’s pace.
Wheat export shipments shifted 10% below the prior four-week average to 14.1 million bushels. Mexico was the top destination, with 3.2 million bushels.
Russia announced plans to suspend exports of wheat, barley, corn and rye to the Eurasion Economic Union until the end of August. Member nations include Armenia, Belarus, Kazakhstan and Kyrgyzstan. The move is an attempt to shore up food security, according to Russia’s economy ministry.
Algeria purchased as much as 25.7 million bushels of milling wheat from optional origins in a tender that closed earlier this week. Much of that total is expected to be sourced from France. The purchase price, around $485 per ton, is very high and “creates a new benchmark reflecting the tightness in world supplies following the Ukraine crisis,” according to one trader.
Japan issued a tender to purchase 6.0 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Friday. Of the total, 51% is expected to be sourced from the U.S. The grain is for shipment beginning on March 21.
Iran is believed to have purchased 8.8 million bushels of milling wheat, likely sourced from Europe, in a tender that closed yesterday. Iran also purchased 60,000 tons of soyoil this week, which was likely sourced from South America. Iran is seeking “rapid shipment” in March and April for these purchases.
Tunisia issued a new international tender to purchase 4.6 million bushels of soft wheat and 4.6 million bushels of animal feed barley from optional origins that closes on Friday. Tunisia rejected all offers for a similar tender issued earlier this week, when prices had jumped to the highest levels in more than a decade. If purchases are made in the current tender, the grain would be for shipment between March 20 and May 20.
Preliminary volume estimates were for 159,853 CBOT contracts, shifting moderately above Wednesday’s final count of 131,127.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
768
738.5
757.75
24.75
22-May
765.5
729
755.75
21.75
Soybeans
22-Mar
1716.25
1681.25
1700
13.5
22-May
1702
1661.5
1686.25
13.5
Soymeal $/ton
22-May
490
473.3
483.7
9
Soyoil cents/lb
22-May
75.75
73.68
74.68
0.49
Wheat $/bushel
22-Mar
747
1073.75
-125.75
22-May
1221.25
1080
1087
-119.25
KC Wheat
22-Mar
1066.25
1066.25
1052.25
-40
22-May
1151
1040.75
1065.75
-52.25
MPLS Wheat
22-Mar
1108.25
22-May
1120
1031.75
1055
-33.75
Live Cattle cents/lb
22-Apr
137.75
135.825
135.85
-1.725
Feeder Cattle cents/lb
22-Apr
159.225
156.05
156.3
-3.85
Lean Hogs cents/lb
22-Apr
107.75
106.775
107.5
0.1
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Apr
114.88
105.74
106.24
-2.46
Diesel
22-Apr
3.8424
3.2835
3.2889
-0.1754
Unleaded Gasoline $/gallon
22-Apr
3.4269
3.1341
3.1484
-0.1454
Natural Gas
22-May
4.707
4.538
4.668
0.107
U.S. Dollar Index
22-Mar
98.515
97.71
98.5
0.547
Gold $/ounce
22-Apr
2015.1
1975
2000.1
14.2
Copper
22-Mar
4.6495
4.574
4.636
0.072
Fertilizer Swaps
(as of 02/25)
DAP Tampa-index
842.5
7.5
DAP-New Orleans
857.1
19.29
Urea-New Orleans
683.4
99.21
Urea-Middle East
665.0
65
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
606.3
0
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