Afternoon report: Soybeans and wheat move moderately higher; corn closes narrowly mixed.
Ever since Russia invaded Ukraine nearly a month ago, grain prices have been highly volatile. Daily gains and losses of 3%, 4%, 5% (or more) have been commonplace since late February. (More advice on dealing with volatility is below – keep reading!) But Tuesday’s price changes were mostly muted – a relative rarity these past few weeks. Wheat prices firmed 0.5% to 1.25%, while soybeans trended 0.4% higher today. Corn prices closed with narrowly mixed results.
Over the next several days, parts of the western Corn Belt will remain completely dry while parts of the eastern Corn Belt and Great Lakes region could gather another 1.5″ or more additional rains, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts widespread seasonally wet weather for most of the U.S. between March 29 and April 4, with warmer-than-normal conditions building in the Southern Plains, Mid-South and Ohio River Valley.
On Wall St., the Dow firmed 193 points higher in afternoon trading to 34,746 as investors adjust to the expectations to see as many as six additional interest rate hikes this year. Energy prices were mixed and weren’t beholden to the same level of volatility often seen in recent sessions. Crude oil dropped 0.5%, staying above $111 per barrel. Gasoline dropped 1%, while diesel firmed more than 1.5%. The U.S. Dollar firmed slightly.
On Monday, commodity funds were net buyers of all major grain contracts, including corn (+11,000), soybeans (+13,000), soymeal (+3,000), soyoil (+4,500) and CBOT wheat (+15,000).
NOTE: Today is National Ag Day. And while we celebrate agriculture every day at Farm Progress, our editors took some extra time to compile a slideshow of the things we love most about this industry. Click here to take a look.
Corn
Corn prices didn’t move the needle much today. Nearby contracts were subject to some profit-taking, while July, September and December contracts moved modestly higher. May futures dropped 4.5 cents to $7.5175, with July futures inching 0.25 cents higher to $7.2850.
Corn basis bids jumped 15 cents higher at an Ohio elevator while holding steady elsewhere across the central U.S. on Tuesday.
Per the latest data from the European Commission, EU corn imports during the 2021/22 marketing year have reached 467.3 million bushels through March 20, which is fractionally below last year’s pace.
Turkey issued an international tender to purchase 12.8 million bushels of animal feed corn from optional origins that closes on March 28. Turkey has been an active grain buyer in recent months despite high prices as the country wrestles with domestic shortages after facing historic drought last season.
What’s the best strategy for navigating very volatile commodity prices? Brady Huck, risk advisor with Advance Trading, offers three suggestions. First, define risk while retaining opportunity. Second, use tools to mange and embrace volatile markets. Finally, manage cash flow and equity. Huck serves up additional analysis around these ideas in today’s Ag Marketing IQ blog – click here to learn more.
Fertilizer prices have risen sharply since the beginning of January 2021. Anhydrous ammonia has risen 203% since that time, for example, and liquid nitrogen is up 162%. Now, multiple members of Congress are urging the Biden administration to “review all available options to lower the cost of fertilizer” in a letter that spelled out several ways to accomplish this. Farm Futures policy editor Jacqui Fatka took a closer look at the situation – click here to learn more.
Preliminary volume estimates were for 225,455 contracts, moving slightly above Monday’s final count of 215,353.
Soybeans
Soybean prices were trending higher again on Tuesday, moving tantalizingly close to $17 per bushel again. Export optimism in the U.S. and production challenges in South America are keeping the bulls around for now. May futures added 6.25 cents to $16.9725, with July futures up 7 cents to $16.7925.
Soybean basis bids were steady to firm across the central U.S. on Tuesday after rising 2 to 10 cents higher at three Midwestern locations today.
Private exporters announced to USDA the sale of 8.8 million bushels of soybeans for delivery during the 2021/22 marketing year, which began September 1.
The European Union’s 2021/22 soybean imports have reached 362.3 million bushels through March 20, which is a year-over-year reduction of 7.8% so far. EU soymeal imports are also trending slightly below last year’s pace, with 11.73 million metric tons.
Egypt’s state grains buyer announced earlier today that is has purchased 80,000 metric tons of soyoil in an international tender. The source was not immediately disclosed. The soyoil is for arrival in May.
Preliminary volume estimates were for 132,312 contracts, trending fractionally above Monday’s final count of 131,656.
Wheat
Wheat prices moved higher again on Tuesday on expectations for continued export disruptions in the Black Sea region as heavy fighting continues between Russia and Ukraine. A remarkable benchmark was achieved today – nearby Chicago, Kansas City and Minneapolis contracts are all back above $11 per bushel. May Chicago SRW futures inched 0.75 cents higher to $11.20, May Kansas City HRW futures added 6.25 cents to $11.1950, and May MGEX spring wheat futures rose 12.5 cents to $11.0125.
EU wheat exports for the 2021/22 marketing year have reached 720.9 million bushels through March 20, putting it slightly below last year’s pace. EU barley exports are tracking fractionally lower year-over-year, with 262.3 million bushels.
Planting disruptions are expected in some parts of Ukraine, but the northwestern Rivne region is already started sowing spring wheat, oats and sugarbeets, with additional plans to plant corn, soybeans and sunflower on as much as 1.038 million acres. The hope is that production in Rivne will partially make up for reductions in other areas.
Iraq issued a tender to purchase 1.8 million bushels of milling wheat from optional origins that had originally expired March 22 but has now been extended to March 24. Australian wheat is thought to be the lowest offer so far. The grain is for shipment 30 days after a contract is awarded.
Lebanon plans to issue a tender to buy 1.8 million bushels of wheat from India, subject first to the country’s central bank opening the necessary credit line to make the purchase. Lebanon typically purchases most of its imported wheat from Ukraine and is looking to alternative sources amid the current geopolitical turmoil there.
Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes April 4. The grain is for shipment 40 days after a contract is signed.
Preliminary volume estimates were for 64,228 CBOT contracts, sliding moderately below Monday’s final count of 83,366.
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
