Morning report: Grain and oilseed markets drift lower on stronger dollar and growing concerns about the global economy. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-5 cents
Soybeans down 6-9 cents; Soymeal down $2.90/ton; Soyoil up $0.09/lb
Chicago wheat down 4-5 cents; Kansas City wheat down 3-5 cents; Minneapolis wheat down 2-3 cents
*Prices as of 6:25am CDT.
I’m back! Did I miss anything this week?! Kidding – you know I kept up with all the market drama this week while I was at Husker Harvest Days! Thank you to everyone who came out to my market outlook sessions this week. I appreciated your participation and enjoyed visiting with those of you who stuck around after the session. HHD is truly one of my favorite events of the year – I love seeing and chatting will all of the growers on the Plains and can’t wait to see you all again next year!
For those who couldn’t make it, here are the 2023 Acreage Projections I discussed in my outlook, calculated from our August 2022 farmer survey.
And as always, feel free to reach out if you ever have any questions or comments about the markets. Or if you want to give me a hard time for flashing my lawn with Tenacity like the Syngenta reps did at Farm Progress Show!
Feedback from the Field updates! Are you combining yet? 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!
Breaking overnight
Russian president Vladimir Putin proclaimed at a summit in Uzbekistan that Russia would be willing to give 300,000 metric tonnes of fertilizer currently anchored in European ports due to sanctions to developing countries for free if the West would lift economic sanctions against the country.
Putin protested Europe’s partial lift of sanctions that were implemented following Russia’s unprovoked military invasion into Ukraine. Putin continues to use the threat of global hunger to force developed nations to negotiate with Russian delegates.
Separately, the U.N. has been working with U.S. firm Trammo this week to broker a deal that would allow Russian anhydrous ammonia supplies to flow through a pipeline in Ukraine onto the Black Sea export market.
Ukrainian corn exports
It’s no secret that corn prices fluctuated following the “Grain Initiative” that reopened Ukrainian port facilities in the Black Sea. Prior to Russia’s naval blockade, Ukraine was the world’s fourth largest corn exporter. The conflict’s reduced trade flows paired with heat losses from other large corn producers in the Northern Hemisphere this summer will keep global corn supplies at the tightest level since China’s 2019/20 corn buying spree.
During the first month of the “Grain Initiative,” approximately 25.5 million bushels of Ukrainian corn returned to international channels. Only 40.5 million bushels of Ukrainian corn were exported in the first five months of Russia’s occupation.
But Ukraine still has a massive backlog of corn supplies to be shipped from the 2021/22 marketing year when it harvested its second largest corn crop on record. This year’s crop will only be the seventh largest Ukrainian corn harvest, but nearly 40% of it is expected to remain trapped in storage for another year.
Freeing up Ukraine’s trapped corn bushels would help ease some supply tightness on the global market, but it won’t completely offset the 1.5-billion-bushel production loss global markets are expected to face this year due to this summer’s excessive heat across Europe and the U.S. The current Ukrainian shipping paces still fall short of the speeds needed to boost liquidity in the global corn market.
For U.S. producers, that should help keep a stable floor under high prices during harvest. Corn supplies are likely to remain tight for another year, but that is not likely to provide the same certainty for high prices as it has over the past two years, especially if Ukrainian shipping volumes increase.
My latest E-corn-omics column dives into the recent paces of Ukraine’s corn exports and examines the effects of the backlog on international corn prices. Check it out if you’re curious for more!
Inputs
Farm Futures’ executive editor Mike Wilson’s latest This Business of Farming column summarizes the ways Russia is weaponizing fertilizer supplies to re-structure the world older.
I have a few comments in the article about the prospects of global expansion in the fertilizer market. Spoiler alert – fertilizer producers are ramping up production slightly in response to high prices in the market, but don’t expect an expansion that would cause fertilizer prices to collapse anytime soon.
“That’s what we’re seeing in Wall Street right now – shareholders opt for short term plans that guarantee a good dividend the next quarter,” says me in the article. “If you start talking about investing billions in a plant that won’t earn returns for a decade, shareholders don’t want that, especially if farmers are willing to pay the higher prices – which they are.”
The silver lining here is that the U.S. actually produces most of its fertilizer supplies within our own borders, which insulates us a little from some of the global issues plaguing the fertilizer market. It means that U.S. farmers are not likely to face availability issues with fertilizer, but high prices will continue to persist in line with global trends.
Return of missing exports data
After a four-week hiatus following a series of snafus in implementing a new reporting system, USDA’s weekly Export Sales report returned to its normal scheduled publishing yesterday morning.
My colleague, Ben Potter, recapped the report which was viewed as a snoozer by the markets yesterday. While USDA did report some favorable wheat export sales volumes, Potter writes that the corn export volumes did not move the markets much. Soybean shipments trended higher, which is typical for this time of year.
You can check out Potter’s Weekly Export Sales recap here.
Corn
Corn prices drifted $0.01-$0.05/bushel lower this morning as the December 2022 contract continues to scale away from the $7/bushel benchmark it flirted with earlier this week. Lackluster corn export sales data reported by USDA yesterday did not help the market’s cause this morning and looming concerns about global demand amid a potential global economic slowdown also took a bite out of corn futures during the overnight trading session.
Harvest activity is ramping up in southern areas of the Corn Belt. Clear skies in those regions through the weekend will likely support more rapid combining paces this weekend, which also pressured corn futures prices lower this morning.
Reuters reported yesterday that corn growers in Argentina – the world’s third largest corn exporter – have stalled planting progress amid excessively dry soils and only slim chances for rain in the near future.
“The vast Pampas plains of the South American nation are hitting the start of the corn planting season after almost no rainfall in some four months,” a Reuters report by Maximilian Heath stated yesterday. “Forecasts predict more dry weather ahead with scarce showers.”
Forecasters and farmers alike are bracing for what could be considered a “Great Drought” in South America this winter season, echoing fears of yield shortfalls similar to what the market experienced last year. Pergamino, a farm town in the Buenos Aires province, only recorded 6 millimeters of rain during the June-August winter period. It was the smallest precipitation volume recorded since 1933.
“This is one of the most complex situations we have seen in recent decades. We have to say that it is the worst planting scenario for corn in the last 27 years,” Cristian Russo, chief agronomist at the Rosario grains exchange, told Reuters.
Soybeans
Soybean futures prices continue to hang in the balance of a more moderated soybean crop, expectations for a large crop in Brazil, and Chinese demand for soybeans from the Western Hemisphere.
“On the one hand, the expected warm and dry weather is beneficial to crops, which will help American farmers to harvest early autumn,” analysts from Zhongzhou Futures in China said in a note, as reported by Reuters. “On the other hand, competition from South American supplies continues to put pressure on U.S. soybean exports.”
While a complete price collapse for soybeans was avoided yesterday thanks to a temporary deal brokered by the U.S. government between railways and their labor unions, soybean prices will likely remain sensitive to any potential breakdowns in the negotiating process or if workers in the union do not agree to the deal its leaders negotiated with the government and the railways early yesterday morning.
The same price responsiveness will likely apply to corn prices – approximately 24% of the U.S. corn crop is transported via rail.
Wheat
Wheat prices edged $0.02-$0.06/bushel lower this morning, erasing earlier overnight gains from dry planting conditions in the Plains on a strengthening dollar amid global economic jitters. Losses were somewhat offset by encouraging wheat export sales volumes reported in USDA’s massive export data dump released yesterday.
Weather
Rain is shifting into the Upper Midwest and Central Plains this morning, according to NOAA’s short-range forecasts. The showers are likely to hover across the Upper Midwest over the weekend, dropping up to an inch of rain in Northern Minnesota over the next 24 hours, with lighter accumulation expected elsewhere in the region during that time.
Corn silage chopping started at the Holland Dairy Farm on Wednesday, so of course there is rain in the forecast now. The showers aren’t likely to stop harvest progress for grain farmers, as the crop still hasn’t quite hit peak maturity in the Upper Midwest. But the added showers will certainly slow down maturation
The 6-10-day NOAA outlook continues to forecast high heat for most of the Heartland through the end of September. But chances for rain are increasing in the drought-stressed Plains region, which should aid winter wheat sowing over the next couple weeks.
The 8-14 day NOAA outlook is also trending warmer, much like the 6-10-day forecast. But the end of September is likely to be drier across the country. That will aid harvesting progress, which is likely to hit its peak activity by the end of September.
Financials
Wall Street girded itself overnight for higher interest rates as the S&P 500 fell 0.89% to $3,884.50 during the overnight trading session. Fears about a global recession and worries about the health of the global macroeconomic environment permeated into equity indices and pushed the and U.S. treasury bond yields dollar higher.
What else I’m reading this morning on our website, FarmFutures.com:
Naomi Blohm explains how increased seasonal demand both at home and abroad is keeping milk prices firm.
Jacqui Fatka summarizes ag groups’ responses to the tentative agreement to keep railways open
Check out our team’s coverage of the September 2022 WASDE reports for all of the key highlights that ushered in the bulls during Monday’s trading session.
Three consecutive years of La Ni?a? Bryce Knorr weighs the odds of crop damage in the U.S. and South America on the persistent weather patterns.
Morning Ag Commodity Prices – 9/16/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.8025
6.7175
6.725
-0.05
-0.74%
MAR ’23 CORN
$ / BSH
6.855
6.775
6.7775
-0.05
-0.73%
MAY ’23 CORN
$ / BSH
6.8525
6.775
6.7775
-0.05
-0.73%
JUL ’23 CORN
$ / BSH
6.785
6.7125
6.7125
-0.05
-0.74%
SEP ’23 CORN
$ / BSH
6.33
6.2975
6.2975
-0.03
-0.47%
DEC ’23 CORN
$ / BSH
6.2225
6.1525
6.1525
-0.0475
-0.77%
AR2 ’24 CORN
$ / BSH
6.275
6.2475
6.2475
-0.02
-0.32%
AY2 ’24 CORN
$ / BSH
6.2975
6.2825
6.2825
-0.01
-0.16%
JUL ’24 CORN
$ / BSH
6.2825
#N/A
6.2675
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
14.55
14.4025
14.445
-0.07
-0.48%
JAN ’23 SOYBEANS
$ / BSH
14.6175
14.475
14.5075
-0.0725
-0.50%
MAR ’23 SOYBEANS
$ / BSH
14.6175
14.4775
14.5125
-0.07
-0.48%
MAY ’23 SOYBEANS
$ / BSH
14.61
14.485
14.5125
-0.075
-0.51%
JUL ’23 SOYBEANS
$ / BSH
14.585
14.4525
14.4825
-0.0725
-0.50%
AUG ’23 SOYBEANS
$ / BSH
14.3125
14.2175
14.235
-0.085
-0.59%
SEP ’23 SOYBEANS
$ / BSH
13.865
#N/A
13.865
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.6825
13.5525
13.565
-0.095
-0.70%
AN2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.685
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.595
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.515
#N/A
13.545
0
0.00%
OCT ’22 SOYBEAN OIL
$ / LB
67.24
66.7
66.87
0.08
0.12%
DEC ’22 SOYBEAN OIL
$ / LB
64.7
64.05
64.32
0.02
0.03%
OCT ’22 SOY MEAL
$ / TON
435.5
431.3
431.6
-2.9
-0.67%
DEC ’22 SOY MEAL
$ / TON
429
424.6
425.3
-2.7
-0.63%
JAN ’23 SOY MEAL
$ / TON
424.5
420.3
420.8
-2.7
-0.64%
MAR ’23 SOY MEAL
$ / TON
417.8
414.1
414.6
-2.8
-0.67%
MAY ’23 SOY MEAL
$ / TON
413.6
411
411.5
-2.8
-0.68%
DEC ’22 Chicago SRW
$ / BSH
8.52
8.3625
8.39
-0.06
-0.71%
MAR ’23 Chicago SRW
$ / BSH
8.68
8.525
8.5525
-0.0525
-0.61%
MAY ’23 Chicago SRW
$ / BSH
8.765
8.63
8.65
-0.045
-0.52%
JUL ’23 Chicago SRW
$ / BSH
8.675
8.5575
8.5775
-0.03
-0.35%
SEP ’23 Chicago SRW
$ / BSH
8.6875
8.59
8.5975
-0.0125
-0.15%
DEC ’23 Chicago SRW
$ / BSH
8.74
8.6625
8.69
0.035
0.40%
AR2 ’24 Chicago SRW
$ / BSH
8.7
8.68
8.68
0.0525
0.61%
DEC ’22 Kansas City HRW
$ / BSH
9.315
9.18
9.2175
-0.045
-0.49%
MAR ’23 Kansas City HRW
$ / BSH
9.3125
9.1775
9.21
-0.0425
-0.46%
MAY ’23 Kansas City HRW
$ / BSH
9.2775
9.175
9.1975
-0.035
-0.38%
JUL ’23 Kansas City HRW
$ / BSH
9.11
9.0375
9.0575
-0.0225
-0.25%
SEP ’23 Kansas City HRW
$ / BSH
9.03
9
9.03
0.0225
0.25%
DEC ’23 Kansas City HRW
$ / BSH
9
9
9
-0.0175
-0.19%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
8.95
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.33
9.235
9.2625
-0.025
-0.27%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.39
9.3075
9.3275
-0.0225
-0.24%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.38
9.365
9.365
-0.0325
-0.35%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.35
9.35
9.35
-0.0275
-0.29%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.0675
#N/A
9.055
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.005
#N/A
9.0225
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
0
0
0.00%
SEP ’21 ICE Dollar Index
$
110.26
109.54
109.93
0.219
0.20%
OC ’21 Light Crude
$ / BBL
85.94
84.27
85.58
0.48
0.56%
NO ’21 Light Crude
$ / BBL
85.52
83.86
85.16
0.51
0.60%
OCT ’22 ULS Diesel
$ /U GAL
3.2699
3.1677
3.247
0.0418
1.30%
NOV ’22 ULS Diesel
$ /U GAL
3.2288
3.1365
3.2085
0.0369
1.16%
OCT ’22 Gasoline
$ /U GAL
2.435
2.375
2.4233
-0.0054
-0.22%
NOV ’22 Gasoline
$ /U GAL
2.3921
2.3379
2.383
-0.0018
-0.08%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
179.35
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
180.925
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
145.625
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
151.325
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
96.05
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
87.65
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.83
#N/A
19.83
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.38
21.21
21.21
-0.17
-0.80%
NOV ’22 Class III Milk
$ / CWT
21.2
21.06
21.06
-0.33
-1.54%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
