Afternoon report: Corn and some wheat contracts make moderate inroads, while soybeans soften.
Grain prices were mixed on Monday after an uneven round of technical maneuvering as traders scour the horizon for the next set of supply and demand clues. Corn prices firmed another 1% higher on expected U.S. planting delays. The soybean complex sank lower after Indonesia noted some key exclusions in its palm oil export ban. Wheat prices were mixed but mostly firm, anchored by significant gains in Minneapolis contracts.
This week wont be as wet as last week, but some measurable rains are still expected in parts of the Midwest and Plains between tomorrow and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Very few areas are likely to see more than 0.25″ during this time. NOAA’s latest 8-to-14-day outlook predicts a return to seasonally wet weather for the central U.S. between May 2 and May 8, with warmer-than-normal conditions building in the Southern Plains.
On Wall St., the Dow dropped 480 points Monday morning but rebounded to a 56-point gain in afternoon trading to 33,867 as declining treasury yields boosted technology stocks. Some better-than-expected corporate Q1 earnings reports lent additional support. Energy futures slumped lower, with crude oil down 4.25% this afternoon to $97 per barrel. Gasoline fell more than 2.5%. Nearby diesel contracts bucked the overall trend, climbing 2.5% higher. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of soyoil (+4,500) contracts but were net sellers of corn (-5,500), soybeans (-14,500), soymeal (-8,500) and CBOT wheat (-2,000).
NOTE: CME announced this afternoon that it will change daily price limits for several key commodities, effective May 2. That includes:
Corn = 50 cents (up from 35 cents)
Soybeans = 115 cents (up from 90 cents)
CBOT and KC wheat = 70 cents (down from 85 cents)
Corn
Corn prices continue to find support from wet weather in the United States (which could delay plantings in many areas) and war in Ukraine (which puts plantings and exports in jeopardy). May futures added 6.75 cents to $7.9975, with July futures up 8.5 cents to $7.9750.
Corn basis bids were mostly steady on Monday but did tilt 5 cents lower at an Ohio river terminal, 10 cents lower at an Indiana ethanol plant and a penny higher at an Iowa ethanol plant today.
Corn export inspections moved moderately higher from a week ago to reach 65.0 million bushels. That was better than all trade guesses, which ranged between 39.4 million and 59.1 million bushels. Japan (13.7 million) and Mexico (13.5 million) were the top two destinations. Cumulative totals for the 2021/22 marketing year are still well behind last year’s pace, however, with 1.373 billion bushels.
Ahead of the next USDA crop progress report, out later this afternoon and covering the week through April 24, analysts think the agency will show corn plantings at 9% complete, up from 4% a week ago. Individual estimates ranged between 6% and 12%.
What can put options do for you? Grain marketing consultant Roger Wright explores this grain marketing tool in a recent Ag Marketing IQ blog – part one in a series of educational explanations. Click here to get started.
Worried about rising interest rates? Those hikes have “immediate and obvious” impacts, according to grain market analyst Bryce Knorr. Money center banks follow suit by raising their prime rate charged to best business customers. Prime typically is 3% above the Fed Funds rate. That impacts farm operating loans, with interest on CCC loans rising as well. Knorr takes a closer look at interest rate trends in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 357,874 contracts, sliding slightly below Friday’s final count of 384,735.
Soybeans
Soybean prices spilled into the red on Indonesia’s announcement that its palm oil export ban has some key exemptions. The possibility of U.S. farmers switching more acres from corn to soybeans applied additional headwinds today. May futures dropped 16.25 cents to $16.9975, with July futures down 15.25 cents to $16.7275.
Soybean basis bids were mostly steady across the central U.S. to start the week but did trend 4 cents lower at an Ohio elevator and 10 cents higher at an Iowa processor today.
Private exporters reported to USDA the sale of 12.1 million bushels of soybeans to China. Around 19% of that total is for delivery during the 2021/22 marketing year, which began September 1, with the remaining 81% for delivery in 2022/23.
Soybean export inspections shifted 40% lower from a week ago, to 22.1 million bushels. That was nearly below the entire range of trade guesses, which came in be-tween 22.0 million and 39.5 million bushels. China was the No. 1 destination, with 9.9 million bushels. Cumulative totals for the 2021/22 marketing year are still substantially below last year’s pace, with 1.712 billion bushels.
Ahead of this afternoon’s crop progress report from USDA, analysts think the agency will show soybean plantings at 3% through Sunday, up from 1% a week ago. Individual trade guesses ranged between 3% and 5%.
South Korea issued an international tender to purchase 60,000 metric tons of soymeal from optional origins. Offers must be submitted by today, and the grain is for arrival around August 20.
Preliminary volume estimates were for 205,998 contracts, shifting 15% below Friday’s final count of 242,170.
Wheat
Wheat prices were mixed but mostly higher as traders continue to monitor the latest news on U.S. crop quality and export potential from Ukraine. May Chicago SRW futures eased 3.75 cents to $10.6175, May Kansas City HRW futures picked up 3 cents to $11.4575, and May MGEX spring wheat futures rose 20.5 cents to $11.8075.
Wheat export inspections came in at a disappointing 10.6 million bushels. That was below the entire range of trade guesses, which came in between 11.0 million and 17.5 million bushels. Mexico was the No. 1 destination, with 2.0 million bushels. Cumulative totals for the 2021/22 marketing year are tracking 19% below last year’s pace.
Ahead of USDA’s next crop progress report, analysts expect the agency to show winter wheat quality holding steady from the prior week, with 30% of the crop rated in good-to-excellent condition through April 24. Spring wheat planting is expected to come in at 12% complete, with individual trade estimates ranging between 9% and 15%.
Russian consultancy Sovecon estimates that the country’s wheat exports for April will slide 4.5% lower month-over-month to 77.2 million bushels. That would still be nearly triple year-ago results of 29.4 million bushels, however. Russia is the world’s No. 1 wheat exporter, and its grain exports do not appear to be severely hampered by the ongoing invasion of Ukraine so far.
Ukrainian analyst APK-Inform is more bullish on its expectations for the country’s 2022 wheat production potential, moving from a prior estimate of 547.5 million bushels up to 623.2 million bushels. Exports are currently estimated at 452 million bushels for the 2022/23 marketing year.
China says it will stop holding weekly wheat auctions and selling its state reserves, citing dwindling supplies and waning demand. “A lot of the wheat was consumed last year. You can’t keep using that much every year. Inventories were not plentiful either,” one source with a state institution told Reuters.
Algeria issued an international tender to purchase 1.8 million bushels of durum wheat from optional origins that closes on Tuesday. Algeria often buys more than the nominal amount it lists on these tenders. The grain is for shipment in May and June.
Preliminary volume estimates were for 72,729 CBOT contracts, tracking moderately above Friday’s final count of 61,309.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
802
784.75
800.25
6.75
22-Jul
799.25
781
798
8.5
Soybeans
22-May
1723.25
1685.75
1703.5
-16.25
22-Jul
1695.5
1656.5
1675.25
-15.25
Soymeal $/ton
22-Jul
453
445.2
445.6
-6.8
Soyoil cents/lb
22-Jul
82.04
78
80.08
-0.65
Wheat $/bushel
22-May
1080
1045.75
1062
-3.75
22-Jul
1089.5
1055.75
1072.5
-3
KC Wheat
22-May
1156
1132.5
1145.25
3
22-Jul
1163.75
1138.5
1153
5
MPLS Wheat
22-May
1180.75
1157
1176.75
20.5
22-Jul
1181.5
1156.25
1177.5
18.5
Live Cattle cents/lb
22-Apr
141
138.8
139.4
-3.05
Feeder Cattle cents/lb
22-May
162.35
160.125
161.35
-2.525
Lean Hogs cents/lb
22-May
117.9
114.025
114.025
-4.75
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-May
101.55
95.28
99.15
-2.92
Diesel
22-May
4.1142
3.817
4.114
0.1754
Unleaded Gasoline $/gallon
22-May
3.2986
3.1372
3.2557
-0.0493
Natural Gas
22-Jun
6.94
6.471
6.936
0.273
U.S. Dollar Index
22-Jun
101.865
101.05
101.735
0.522
Gold $/ounce
22-May
1932.3
1890
1897.6
-33.4
Copper
22-Apr
4.48
4.411
4.45
-0.1325
Fertilizer Swaps
(as of 04/15)
DAP Tampa-index
1,240.0
0
DAP-New Orleans
1,052.7
0
Urea-New Orleans
854.3
-33.07
Urea-Middle East
995.0
-125
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
-5.51
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
