Afternoon report: Corn, soybeans and wheat all make solid inroads Monday
General export optimism and lingering concerns over production potential kept grain prices firm on Monday. Soybeans turned in the best performance, rising 2.5% after the ensuing round of technical buying. Corn prices trended another 1% higher, posting gains for the fourth consecutive session. Wheat gains were variable, coming in between 1.25% and 2.25% today.
Very little rain is expected to fall on the central U.S. later this week, although the upper Midwest will receive small to moderate amounts between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally hot, dry weather returning to the Northern Plains and upper Midwest between August 29 and September 4.
On Wall St., the Dow tumbled 636 points lower in afternoon trading to 33,070 on fears that the Federal Reserve will continue its aggressive interest rate policy. Energy futures were mixed, with crude oil down more than 0.5% this afternoon to $90 per barrel. Gasoline tumbled nearly 5% lower, while diesel firmed nearly 2% higher. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of corn (+4,500), soyoil (+3,000) and CBOT wheat (+5,500) contracts but were net sellers of soybeans (-2,500) and soymeal (-5,000).
Corn
Corn prices followed other grains higher on Monday, with a healthy round of export inspection data lending additional support today. September futures added 6.5 cents to $6.3250, with December futures up 4.5 cents to $6.2775.
Corn basis bids were steady to mixed to start the week, moving as much as 5 cents higher at an Indiana ethanol plant and as much as 15 cents lower at a Nebraska processor on Monday.
Corn export inspections reached 29.2 million bushels for the week ending August 18, moving moderately higher week-over-week and making it to the higher end of trade estimates, which ranged between 17.7 million and 33.5 million bushels. Mexico was the No. 1 destination, with 11.4 million bushels. Cumulative totals for the 2021/22 marketing year remain well behind last year’s pace, with 2.119 billion bushels.
When USDA releases its next crop progress report later this afternoon, analysts expect the agency to hold corn quality ratings steady, with 57% of the crop in good-to-excellent condition through August 21. Individual trade guesses ranged between 55% and 58%.
Brazil’s second corn harvest is approximately 90% complete, according to the latest report from the country’s AgRural consultancy. The country’s total corn production is expected to climb to a record-breaking effort of 4.567 billion bushels, improving 33% from last season’s drought-plagued crop.
Fitch Solutions estimates that European Union corn production in the 2022/23 season will spill 7.5% lower due to rampant drought and heat. The group projects a total production of 2.642 billion bushels due to sizable year-over-year decreases from France, Poland, Spain, Italy and Germany.
Per the latest data from the European Commission, 2022/23 EU corn imports are trending well above last year’s pace so far, with 127.6 million bushels through August 18.
Ukrainian grain traders UGA expects the country’s 2022 corn production will only reach 944.8 million bushels, which would be a year-over-year reduction of more than 36%, if realized. Ukraine’s wheat harvest is expected to spill 42% lower this season, falling to 698.1. Ukraine is typically a significant exporter of both crops.
Preliminary volume estimates were for 196,392 contracts, which is moderately above Friday’s final count of 151,284.
Soybeans
Soybean prices grabbed double-digit gains on speculation that hot, dry weather in China will lead to an increase in imported grain, which triggered a round of technical buying today. September futures rose 37.75 cents to $15.2650, with November futures up 29.5 cents to $14.3350.
Soybean basis bids climbed 25 cents higher at an Indiana processor and firmed 10 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S. on Monday.
Soybean export inspections saw a moderate decline, moving to 25.2 million bushels for the week ending August 18. That was still toward the higher end of trade estimates, which ranged between 14.7 million and 32.2 million bushels. China was the No. 1 destination, with 13.2 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately behind the prior year’s pace, with 2.057 billion bushels.
Prior to the next crop progress report from USDA, analysts expect the agency to show 58% of this season’s soybean crop rated in good-to-excellent condition through Sunday, which is steady from a week ago. Individual trade guesses ranged between 56% and 59%.
European Union soybean imports during the 2022/23 marketing year reached 65.8 million bushels through August 21, which is a year-over-year decline of around 15% so far. EU soymeal imports are also slightly below year-ago totals, with 2.10 million metric tons during the same period.
In July, China imported 256.1 million bushels of soybeans from Brazil, which was a year-over-year decrease of 11.5%. The United States was the second largest supplier last month, accounting for 13.9 million bushels. Between January and July, the total volume of soybeans imported from the U.S. reached 658.4 million bushels.
Preliminary volume estimates were for 141,232 contracts, moving moderately above Friday’s final count of 92,306.
Wheat
Wheat prices stayed in the green on Monday after some additional bargain buying after prices had slumped to six-month lows late last week. Spillover support from corn and soybeans generated additional tailwinds. September Chicago SRW futures rose 15.5 cents to $7.6875, September Kansas City HRW futures climbed 19 cents to $8.6375, and September MGEX spring wheat futures added 10.75 cents to $8.8550.
Wheat export inspections moved moderately higher week-over-week to 21.8 million bushels. That was also toward the higher end of analyst estimates, which ranged between 9.2 million and 23.9 million bushels. Japan was by far the top destination, with 6.6 million bushels. Cumulative totals for the 2022/23 marketing year are trending moderately below last year’s pace so far, with 165.1 million bushels.
Ahead of this afternoon’s crop progress report from USDA, analysts think the agency will show the winter wheat harvest at 96% complete, up from 90% last week. And spring wheat harvest is expected to move from 16% a week ago up to 29% through August 21.
European Union soft wheat exports during the 2022/23 marketing year have reached 137.8 million bushels through August 21, which is a bit behind last year’s pace (although the European Commission concedes it may have incomplete data). EU barley exports are also lower than year-ago totals, with 63.8 million bushels.
Russian consultancy Sovecon estimates that wheat exports in August will reach 132.3 million bushels, which would be the largest monthly total since last September, if realized.
Egypt’s supply minister has indicated that the country’s current strategic wheat reserves are sufficient for seven months, and its vegetable oil supplies are sufficient for six months.
Preliminary volume estimates were for 72,817 CBOT contracts, sliding slightly below Friday’s final count of 73,811.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
635.25
618
633.5
6.5
22-Dec
631
614.25
629
4.5
Soybeans
22-Sep
1534.5
1478
1527
37.75
22-Nov
1438.5
1393
1435.25
29.5
Soymeal $/ton
22-Oct
422.1
405.3
420.8
12.8
Soyoil cents/lb
22-Oct
67.7
65.38
67.02
0.52
Wheat $/bushel
22-Sep
774
744.5
770.5
15.5
22-Dec
791.75
762.5
788.25
15.75
KC Wheat
22-Sep
869.25
837
865.25
19
22-Dec
869.75
838
866
17.75
MPLS Wheat
22-Sep
891.5
861.75
888.5
10.75
22-Dec
904
874.75
900.5
10.5
Live Cattle cents/lb
22-Aug
141.85
141
141.35
-0.25
Feeder Cattle cents/lb
22-Sep
184.75
183.575
184.25
-0.5
Lean Hogs cents/lb
22-Dec
84.95
83.125
84.45
0.3
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
91.26
86.6
90.67
-0.1
Diesel
22-Sep
3.7835
3.6489
3.7672
0.0667
Unleaded Gasoline $/gallon
22-Sep
3.0175
2.8275
2.889
-0.1285
Natural Gas
22-Oct
9.95
9.143
9.708
0.393
U.S. Dollar Index
22-Sep
109.025
108.02
108.98
0.882
Gold $/ounce
22-Sep
1747
1726
1734.7
-12.9
Copper
22-Aug
3.703
3.669
3.6705
-0.013
Fertilizer Swaps
(as of 08/19)
DAP Tampa-index
840.0
-47.5
DAP-New Orleans
826.8
-2.76
Urea-New Orleans
617.3
-3.31
Urea-Middle East
747.5
-15
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
454.7
13.78
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