Afternoon report: Corn, soybeans and most wheat contracts land in the red on Tuesday
General economic anxiety over rising interest rates sent a broad set of stocks and commodities lower on Tuesday. That included corn, soybeans and most wheat contracts. Corn prices eased 0.3% to 0.6% lower, while nearby soybean contracts dropped 1.5%. Wheat contracts slumped as much as 2.75% lower today.
Some scattered showers are possible later this week, but very little rainfall is expected in the central U.S. between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally dry weather should remain in place for the Northern Plains and upper Midwest between September 6 and September 12, with widespread warmer-than-normal conditions likely during that time, per NOAA’s new 8-to-14-day outlook.
On Wall St., the Dow dropped 374 points lower to 31,724 as investors remain skittish over the likelihood of additional interest rate hikes later this year that could slow down the global economy. Energy futures also sagged lower, with crude oil down more than 5% this afternoon to $91 per barrel. Gasoline also tumbled more than 5% lower, while diesel dropped 2%. The U.S. Dollar softened slightly.
On Monday, commodity funds were net buyers of corn (+12,500) and CBOT wheat (+13,000) contracts but were net sellers of soybeans (-8,500) and soyoil (-1,500). Funds were roughly even when trading soymeal contracts yesterday.
Corn
Corn prices suffered a moderate setback following a round of technical selling and profit-taking on Tuesday. September futures dropped 2.25 cents to $6.8150, with December futures down 4.5 cents to $6.7850.
Corn basis bids were mostly steady across the central U.S. on Tuesday but did tilt 7 cents lower at an Illinois river terminal today.
On Monday afternoon, USDA reported a one-point decline in corn quality through August 28, with 54% of the crop rated in good-to-excellent condition. Another 27% was rated fair (unchanged from last week), with the remaining 19% rated poor or very poor (up a point from last week). Physiologically, 86% has reached the dough stage, 46% is now dented, and 8% is fully mature. All three categories are progressing slower than the prior five-year average.
Yesterday, USDA also issued a statement that it would not release additional weekly export sales data until further notice. Last week, the agency botched its attempt to upgrade to a new reporting system called ESRMS 2.0. There’s currently no timetable on when export sales data will start to be released again.
South Africa’s Crop Estimates Committee released new data on the country’s 2022 corn crop, including a projected production total of 590.7 million bushels. That would be a year-over-year decline of 8%, if realized. South Africa is the continent’s No. 1 corn producer.
South Korea purchased 5.4 million bushels of animal feed corn from optional origins (but likely sourced from South America or South Africa) in an international tender that closed earlier today. The grain is for arrival starting in early December.
Preliminary volume estimates were for 264,445 contracts, spilling 26% below Monday’s final count of 356,655.
Soybeans
Soybean prices followed a broad set of other commodities lower and finished Tuesday’s choppy session with variable losses after a round of technical selling. September futures lost 23.75 cents to $15.11, while November futures eased 3.5 cents to $14.3425.
Soybean basis bids fell 10 cents lower at two Midwestern processors and firmed 12 cents at an Illinois river terminal while holding steady elsewhere across the central U.S. on Tuesday.
Private exporters announced to USDA the sale of 9.7 million bushels of soybeans for delivery to unknown destinations during the 2022/23 marketing year, which begins September 1.
Yesterday afternoon, USDA showed soybean quality ratings holding mostly steady for the week ending August 28, with 57% of the crop in good-to-excellent condition (although the G/E split shifted from 47/10 to 46/11). Another 30% is rated fair (unchanged from last week), with the remaining 13% rated poor or very poor (also unchanged from last week). Ninety-one percent of the crop is now setting pods, versus the prior five-year average of 92%. And 4% is now dropping leaves, versus the prior five-year average of 7%.
Brazilian consultancy Datagro predicts the country’s soybean footprint could increase by as much as 6% in 2022/23 – the 16th consecutive season plantings have grown there. Datagro currently anticipates a record-breaking production of 5.578 billion bushels and exports totaling 3.491 billion bushels.
How do your farm’s crop conditions stack up against other operations in the U.S.? 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 peer anecdotes from around the country.
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Preliminary volume estimates were for 108,124 contracts, taking a moderate dip below Monday’s final count of 146,795.
Wheat
Wheat prices largely faced double-digit losses on some profit-taking and growing concerns of a possible global economic slowdown, which sent a broad set of commodities scattering lower today. December Chicago SRW futures lost 22.75 cents to $8.20, December Kansas City HRW futures dropped 15 cents to $8.9750, and December MGEX spring wheat futures fell 15.75 cents to $9.1750.
Analysts were expecting to see stable spring wheat ratings in yesterday’s crop progress report, but USDA surprisingly moved them four points higher, with 68% of the crop now rated in good-to-excellent condition. Another 26% is rated fair (down two points from last week), with the remaining 6% rated poor or very poor (down two points from last week). Harvest has reached the halfway mark, up from 33% a week ago, but much slower than 2021’s pace of 86% and the prior five-year average of 71%.
French consultancy Agritel increased its estimates for soft wheat production this season to 1.236 billion bushels. In contrast, Agritel said it is expecting the smallest corn crop of the 21st century, with just 425.2 million bushels after battling widespread drought and multiple heatwaves this summer.
Japan issued a regular tender to purchase 3.5 million bushels of food-quality wheat from the United Stated and Canada, which closes on Thursday. Of the total, 71% is expected to be sourced from the U.S. The grain is for arrival by the end of December.
Jordan purchased 2.2 million bushels of wheat from optional origins in an international tender that closed earlier today. The grain is for shipment during the second half of January.
Preliminary volume estimates were for 91,224 CBOT contracts, trending 17% below Monday’s final count of 110,405.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
682.75
671.25
679.75
-2.25
22-Dec
682.75
671
677.25
-4.5
Soybeans
22-Sep
1538.5
1480
1513
-23.75
22-Nov
1440
1408.25
1432.5
-3.5
Soymeal $/ton
22-Oct
433.6
423.5
429.8
-4.2
Soyoil cents/lb
22-Oct
67.83
66.55
67.69
0.14
Wheat $/bushel
22-Sep
824
794
798.25
-23.5
22-Dec
846.25
816.5
820.25
-22.75
KC Wheat
22-Sep
915.75
895.25
908.75
1
22-Dec
916
887.5
897.75
-15
MPLS Wheat
22-Sep
920.25
887.5
904.5
-14
22-Dec
937
906.5
920.5
-15.75
Live Cattle cents/lb
22-Aug
144
141.6
142.5
0.95
Feeder Cattle cents/lb
22-Oct
183.525
181.825
183.225
2.15
Lean Hogs cents/lb
22-Dec
85.975
84.075
85.475
0.875
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Oct
97.66
90.54
91.76
-5.25
Diesel
22-Sep
3.9531
3.722
3.8158
-0.0941
Unleaded Gasoline $/gallon
22-Sep
2.893
2.6661
2.684
-0.1936
Natural Gas
22-Oct
9.365
8.933
9.186
-0.214
U.S. Dollar Index
22-Sep
109.085
108.235
108.74
-0.05
Gold $/ounce
22-Oct
1743.1
1723.7
1723.2
-13.5
Copper
22-Sep
3.634
3.5315
3.547
-0.065
Fertilizer Swaps
(as of 08/26)
DAP Tampa-index
820.0
-20
DAP-New Orleans
815.7
-11.02
Urea-New Orleans
683.4
66.14
Urea-Middle East
795.0
47.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
476.8
22.05
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