Afternoon report: Traders hand out gains for corn, soybeans and wheat ahead of USDA’s big report.
Traders had one last chance on Wednesday to square some positions ahead of tomorrow morning’s May World Agricultural Supply and Demand Estimates report from USDA, which will offer some key information such as initial 2022 corn and soybean production estimates. All grain prices performed well today, with corn prices rising more than 1.5% higher and soybeans firming 1% higher. Wheat futures fared even better, with gains mostly ranging between 2% and 2.5%.
More wet weather is rolling through the Midwest and Plains between Thursday and Sunday, with some areas set to gather another 1″ or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts more seasonally wet weather for the Northern Plains and upper Midwest between May 18 and May 24, with warmer-than-normal conditions likely for the southern half of the country.
On Wall St., the Dow tipped 30 points lower in afternoon trading to 32,130 as investors assessed the latest inflation data. April’s consumer price index showed a higher-than-expected increase but stayed slightly below March levels of 8.5%, which was a 40-year high. Some energy futures jumped higher today. Crude oil climbed 5.5% in afternoon trading to $105 per barrel.
On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+2,000), soybeans (+2,500) soymeal (+500), soyoil (+3,500) and CBOT wheat (+3,000).
Corn
Corn prices picked up solid gains after a round of technical buying on Wednesday amid healthy skepticism over U.S. production potential and expectations for a healthy round of export data coming out first thing tomorrow. Export challenges in Ukraine continue to lend additional support. May futures firmed 15.75 cents to $8.0225, with July futures up 13.25 cents to $7.9950.
Corn basis bids were steady to firm after rising 1 to 7 cents higher across a half-dozen Midwestern locations on Wednesday.
Ethanol production made moderate inroads last week but remained below the 1-million-barrel-per-day benchmark for the fifth consecutive week, with a daily average of 991,000 barrels. Ethanol stocks inched 1% higher.
Prior to Thursday morning’s export report from USDA, analysts think the agency will show corn sales ranging between 19.7 million and 53.1 million bushels for the week ending May 5.
And ahead of tomorrow morning’s WASDE report from USDA, analysts offered an average production estimate of 14.773 billion bushels for the 2022 corn crop, assuming average yields of 179.6 bushels per acre. Individual trade guesses ranged between 14.414 billion and 15.115 billion bushels.
Farm Futures grain market analyst Jacqueline Holland’s latest e-corn-omics blog covers a lot of ground, including thoughts on USDA’s Prospective Plantings report, the agency’s June 30 acreage report, planting progress trends and much more. Click here to learn more.
Preliminary volume estimates were for 232,491 contracts, trending slightly higher than Tuesday’s final count of 210,848.
Soybeans
Soybean prices captured moderate gains on a round of technical buying as traders adjusted their positions ahead of tomorrow’s WASDE report. Red-hot crude oil prices created additional tailwinds today. May futures rose 21.75 cents to $16.5175, with July futures up 13.75 cents to $16.06.
Soybean basis bids were steady to firm after rising 10 cents higher at an Iowa processor and 1 to 5 cents higher across three interior river terminals on Wednesday.
Prior to Thursday morning’s export report from USDA, analysts expect to see soybean sales ranging between 7.3 million and 44.1 million bushels for the week ending May 5. Analysts also think USDA will show between 20,000 and 450,000 metric tons of soymeal sales, plus up to 40,000 MT of soyoil sales.
And ahead of tomorrow’s WASDE report from USDA, analysts expect the agency to show 2022 soybean production potential at 4.613 billion bushels, assuming average yields of 51.4 bushels per acre. Individual trade guesses ranged between 4.435 billion and 4.727 billion bushels.
Whatever the report brings, flexibility should be a hallmark of your marketing plan, according to Cat Sullivan with Advance Trading Inc. “Fundamentals will change, and your plan for marketing should offer downside protection and a plan for capturing a rally,” she writes in a recent Ag Marketing IQ blog. “Don’t get caught in the market inverse or in the noise of the next headline.” Click here to learn more.
Preliminary volume estimates were for 125,379 contracts, which was slightly higher than Tuesday’s final count of 106,160.
Wheat
Wheat prices continued to march higher today as traders assessed a variety of factors, including poor U.S. crop quality, a drought-stressed crop in France and limited export capacity in Ukraine. July Chicago SRW futures gained 21.75 cents to $11.1450, July Kansas City HRW futures rose 26.5 cents to $12.0150, and July MGEX spring wheat futures climbed 41.75 cents to $12.5525.
Ahead of Thursday morning’s export report from USDA, analysts offered a wide range of trade guesses on how wheat sales might shake out, with trade guesses ranging between 900,000 and 17.5 million bushels for the week ending May 5.
French farm office FranceAgriMer slightly reduced its estimates for the country’s 2021/22 wheat exports to 633.8 million bushels, citing lower global demand amid historically high prices. Rains are also sorely needed over the next two weeks to protect quality and yields for the current crop, according to the head of FranceAgriMer’s crop committee.
Russian wheat sales were relatively stable in March and April, with the country’s Sovecon consultancy estimating around 80.8 million bushels were exported in each of the past two months. Russia is the world’s No. 1 wheat exporter and has not seen noticeable grain export disruptions since waging war against Ukraine.
Jordan purchased 2.2 million bushels of milling wheat from optional origins in an international tender that closed earlier today. The grain is for shipment in late June.
Japan hopes to purchase 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley in a simultaneous buy-and-sell auction that will be held on May 18. The grain is for shipment by the end of August for a late October arrival.
Preliminary volume estimates were for 61,546 CBOT contracts, tracking 11% higher than Tuesday’s final count of 55,420.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
802.75
788
802.25
15.75
22-Jul
790.5
775.5
788.5
13.25
Soybeans
22-May
1658
1629
1650.25
21.75
22-Jul
1615
1587.5
1606.75
13.75
Soymeal $/ton
22-Jul
407.2
397.3
397.9
-3.9
Soyoil cents/lb
22-Jul
83.52
80.6
83.45
2.43
Wheat $/bushel
22-May
1115
1100
1108.75
25.5
22-Jul
1126.5
1094.25
1113
21.75
KC Wheat
22-May
1191
1185
1186.25
18.5
22-Jul
1207.25
1175
1200.5
26.5
MPLS Wheat
22-May
690
ERR
1250.5
22-Jul
1258
1213.5
1256
41.75
Live Cattle cents/lb
22-Apr
134.875
132.35
133.525
1.125
Feeder Cattle cents/lb
22-May
171.5
169.3
169.85
-2
Lean Hogs cents/lb
22-Jun
101.9
99.5
100.35
-1.225
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
106.44
98.2
105.26
5.5
Diesel
22-May
4.0614
3.9214
3.9352
0.003
Unleaded Gasoline $/gallon
22-May
3.7087
3.5057
3.6723
0.1308
Natural Gas
22-Jul
7.803
7.385
7.749
0.282
U.S. Dollar Index
22-Jun
104.155
103.405
103.89
-0.053
Gold $/ounce
22-Jun
1857.8
1830.6
1849.9
10
Copper
22-May
4.245
4.155
4.201
0.0465
Fertilizer Swaps
(as of 05/06)
DAP Tampa-index
1,175.0
0
DAP-New Orleans
956.3
-33.07
Urea-New Orleans
713.8
-24.8
Urea-Middle East
795.0
-15
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
0
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