Morning report: Plus – breaking down yesterday’s Federal Reserve rate hikes and their impacts to the ag markets. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 2-6 cents
Soybeans down 11-15 cents; Soymeal down $4.80/ton; Soyoil down $0.87/lb
Chicago wheat down 14-15 cents; Kansas City wheat down 11-12 cents; Minneapolis wheat down 8-9 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates – last weeks of the season! How is harvest progressing on your farm this fall?! 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!
My latest FFTF column is live on our site! Soybean harvest is rapidly coming to a close across the country and more and more FFTF respondents are reporting corn harvest as complete.
Responses are starting to slow as many growers are wrapping up for the year, so our time together in FFTF this growing season will also come to an end in the upcoming weeks. So be sure to drop any insights you’d like to share with us from the 2022 season at this link and I will share them on our map as well as in my columns as harvest season winds down. Thanks! -JH
Corn
Corn prices fell $0.02-$0.06/bushel overnight on continued Ukrainian shipping paces in the Black Sea, as well as some spillover weakness from the financial markets due to the Federal Reserve’s latest interest rate hike.
China and Brazil moved closer to deal to boost corn trading volumes between the two countries yesterday, which would likely mean U.S. corn exports will see reduced purchases from China as a result. Specifically, China’s customs administration approved several Brazilian corn exporting countries yesterday.
Brazil’s traditional corn buyers – Spain, Egypt – will likely shift their purchases to the U.S. following the deal. That likely will not be enough to offset lower Chinese volumes, however.
While farmers may miss out on export opportunities, they could still capitalize on some lucrative stock picks. ADM, Bunge, Cargill, Louis Dreyfus Co., and Cofco are all on the list of newly approved Brazilian corn exporters to China. And after a robust third quarter earnings season, these companies could be in prime position for even more stock price gains.
The U.S. is only expected to export 14% of its total corn supplies this year, so this isn’t completely devastating news for corn producers. But be smart with the cash you have on hand and consider investing in some of those companies if you haven’t already to offset those looming export losses.
Soybeans
Soybean prices dropped $0.11-$0.15/bushel this morning as Brazilian trucker protests showed signs of easing and financial markets stumbled on the latest Fed interest rate hikes. Some profit taking was likely at play after soybean prices hit a six-week high yesterday on the heels of strong soyoil prices. The edible oil complex gave up some of those gains overnight on global demand concerns.
Outgoing Brazilian president Jair Bolsonaro urged truckers currently protesting his election defeat across the country to lift blockades. The protests have disrupted grain flows in Brazil, which is the world’s third largest ag exporter.
Wheat
Wheat prices fell $0.08-$0.15/bushel on similar factors facing the corn market this morning – a weaker dollar, steady shipping paces in the Black Sea, and broad financial market unease.
“Russia resuming participation in the Black Sea grain corridor prompted the fall,” Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, told Reuters last night. “We suspect this will not be the final word on the issue but that is good news while it lasts.”
Australia is facing quality damages to its wheat crop – formerly expected to be the country’s second highest wheat harvest on record – amid excessive rains during peak harvest season. “There have been some growers who have had total loss … it’s still pretty raw for many people,” Brett Hosking, an Australian farmer in the southern Victoria state and GrainGrowers chairman, told Reuters.
“Floods have come at the worst time as the wheat crop was getting ready for harvest,” echoed Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney. “Initial estimates are that around half of the crop or around 8 million tonnes (294M bu.) have been reduced to feed wheat quality on the east coast.”
Russia pleaded to the U.N. overnight to help other countries better access its grain and fertilizer supplies. Sounds like a personal problem, bro.
Weather
The Colorado Front Range is expecting its “first measurable snow” today, according to NOAA’s short-term forecasts. A cool front will lower temperatures from my part of the world (Central Plains-ish) to the Northern Plains today and will bring with it rain and snow showers. Over the next 24 hours, the Central Plains and Upper Midwest will likely see up to a tenth of an inch of precipitation. Western Kansas could see rainfall totals of up to three quarters of an inch today.
In fact, a band of mixed snow and rain will stretch from the Northern Plains to the Southern Plains by tomorrow and will move east into the Mississippi River Valley on Friday and Saturday. The weather is likely to slow any harvest progress remaining in the Heartland, especially as temperatures drop. But on the bright side, it will be prime anhydrous application weather!
NOAA’s 6-10-day forecasts are now trending warmer for the Upper Midwest and Central/Southern Plains and wetter for the western half of the country (plus Illinois and Wisconsin). Chances for rain are highest in the Pacific Northwest and Upper Midwest, though the Southern Plains are seeing a higher chance for moisture relief as well.
Those trends will begin to shift slightly in the 8-10-day outlook. Forecasts during that time are now trending cooler for the Midwest and Plains and drier for the western half of the country, though the Upper Midwest and Plains still have an above average chance of precipitation accumulation during that time.
That is good news for the Mississippi River basin – meaningful showers over the next couple days and (hopefully) weeks could help restore river levels to keep barge traffic moving up and down the river so that farmers can keep shipping grain and sourcing next year’s fertilizer supplies at profitable prices.
Financials
As expected at the conclusion of yesterday’s Federal Open Market Committee (FOMC) meeting, the Federal Reserve increased the benchmark federal funds interest rate by 0.75% yesterday, marking its fourth straight three-quarters of a point increase and raising the rate to a range between 3.75% to 4%.
The good news was that Fed Chairman Jerome Powell indicated that the Fed may consider implementing smaller hikes going forward. But the bad news is that the Fed is also considering raising rates higher in 2023 than the 5% mark currently expected by the markets.
“The question of when to moderate the pace of increases is now much less important than the question of how high to raise rates and how long to keep monetary policy restrictive,” Powell said in a press conference following the conclusion of yesterday’s two-day FOMC meeting.
Markets had been hoping for slower rate increases leading up to the Fed’s announcement. But while Powell delivered that sentiment to the market, Powell’s additional interest rate increase comments were a most unwelcome sentiment to the market.
“It pushed back against the perhaps naive view in the market that the Federal Reserve will either be tightening or be accommodative,” Edward Park, chief investment officer at Brooks Macdonald, told the Wall Street Journal. “Looking further ahead, markets are having to consider a higher-for-longer backdrop in terms of interest rates.”
High inflation continues to plague the U.S. economy. Strong employment numbers suggest that the interest rate hikes have yet to make a meaningful impact on microeconomic decision making – with the exception of the housing market. But that also points to the Fed having little incentive to stop raising interest rates while inflation persists.
“It is very premature to be thinking about pausing,” Powell said yesterday. “We think we have a ways to go.”
Those comments sent stocks tumbling and the dollar and bond yields rising overnight. The S&P 500 clocked in at 0.66% lower overnight at $3,743.75 as Powell comments from yesterday continued to linger on the market this morning.
The Bank of England will also likely raise its interest rates by 0.75% today as well as the country continues to reel over its recent financial and political crises. “The Bank of England is largely flying blind,” Edward Park added in this morning’s WSJ comments. The BOE’s interest rate hike could keep a bearish price environment at play in the markets today.
What else I’m reading this morning on our website, FarmFutures.com:
For those of you who may have missed my Wednesday morning newsletter, my latest E-corn-omics column is about the implications of the Brazilian election to U.S. farmers.
Bryce Knorr digs through recently released federal crop insurance data to determine how big 2022 crop losses will be by USDA’s January 2023 reports.
A great Bloomberg piece on the significance of Russia pulling out of the Ukrainian grain export deal.
USDA announced $223 million would be allocated to expand meat processing and competition.
Our latest special edition Farm Futures print issue features a series on farmer mental health. It is one of the pieces I am most proud of during my time here, so I cannot recommend checking it out enough!
Morning Ag Commodity Prices – 11/3/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.865
6.815
6.82
-0.055
-0.80%
MAR ’23 CORN
$ / BSH
6.9175
6.87
6.8775
-0.05
-0.72%
MAY ’23 CORN
$ / BSH
6.9125
6.8675
6.875
-0.05
-0.72%
JUL ’23 CORN
$ / BSH
6.8575
6.8125
6.82
-0.0475
-0.69%
SEP ’23 CORN
$ / BSH
6.375
6.3475
6.3625
-0.0275
-0.43%
DEC ’23 CORN
$ / BSH
6.2475
6.215
6.2275
-0.0225
-0.36%
AR2 ’24 CORN
$ / BSH
6.295
6.285
6.295
-0.0225
-0.36%
AY2 ’24 CORN
$ / BSH
6.325
#N/A
6.3375
0
0.00%
JUL ’24 CORN
$ / BSH
6.2875
6.2875
6.2875
-0.015
-0.24%
NOV ’22 SOYBEANS
$ / BSH
14.4
14.28
14.28
-0.12
-0.83%
JAN ’23 SOYBEANS
$ / BSH
14.535
14.375
14.3975
-0.1425
-0.98%
MAR ’23 SOYBEANS
$ / BSH
14.61
14.4525
14.475
-0.14
-0.96%
MAY ’23 SOYBEANS
$ / BSH
14.6825
14.53
14.55
-0.14
-0.95%
JUL ’23 SOYBEANS
$ / BSH
14.7125
14.565
14.575
-0.1425
-0.97%
AUG ’23 SOYBEANS
$ / BSH
14.5275
14.3925
14.395
-0.1375
-0.95%
SEP ’23 SOYBEANS
$ / BSH
14.1625
14.025
14.0575
-0.115
-0.81%
NOV ’23 SOYBEANS
$ / BSH
13.9875
13.8425
13.8675
-0.135
-0.96%
AN2 ’24 SOYBEANS
$ / BSH
13.985
13.9475
13.9475
-0.0825
-0.59%
AR2 ’24 SOYBEANS
$ / BSH
13.9175
#N/A
13.9475
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.87
#N/A
13.915
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
75.79
74.75
74.76
-0.85
-1.12%
JAN ’23 SOYBEAN OIL
$ / LB
73.47
72.49
72.52
-0.76
-1.04%
DEC ’22 SOY MEAL
$ / TON
424.8
420.1
420.4
-4.1
-0.97%
JAN ’23 SOY MEAL
$ / TON
417.2
412.7
413.1
-3.9
-0.94%
MAR ’23 SOY MEAL
$ / TON
408.8
404.9
405.3
-3.5
-0.86%
MAY ’23 SOY MEAL
$ / TON
405.1
401.3
401.8
-3.4
-0.84%
JUL ’23 SOY MEAL
$ / TON
404.6
401
401.7
-3
-0.74%
DEC ’22 Chicago SRW
$ / BSH
8.47
8.2925
8.31
-0.15
-1.77%
MAR ’23 Chicago SRW
$ / BSH
8.66
8.4875
8.5025
-0.1475
-1.71%
MAY ’23 Chicago SRW
$ / BSH
8.7325
8.585
8.61
-0.125
-1.43%
JUL ’23 Chicago SRW
$ / BSH
8.705
8.5925
8.6075
-0.1325
-1.52%
SEP ’23 Chicago SRW
$ / BSH
8.755
8.6525
8.6825
-0.11
-1.25%
DEC ’23 Chicago SRW
$ / BSH
8.8325
8.72
8.755
-0.1125
-1.27%
AR2 ’24 Chicago SRW
$ / BSH
8.8325
8.7425
8.7475
-0.12
-1.35%
DEC ’22 Kansas City HRW
$ / BSH
9.4375
9.275
9.29
-0.1125
-1.20%
MAR ’23 Kansas City HRW
$ / BSH
9.42
9.26
9.28
-0.1075
-1.15%
MAY ’23 Kansas City HRW
$ / BSH
9.385
9.2475
9.2525
-0.1125
-1.20%
JUL ’23 Kansas City HRW
$ / BSH
9.3225
9.2
9.2175
-0.0875
-0.94%
SEP ’23 Kansas City HRW
$ / BSH
9.2425
9.1825
9.2
-0.095
-1.02%
DEC ’23 Kansas City HRW
$ / BSH
9.3225
#N/A
9.3225
0
0.00%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.265
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.4925
9.395
9.41
-0.0825
-0.87%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.6075
9.51
9.51
-0.095
-0.99%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.6625
9.585
9.585
-0.0775
-0.80%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.59
9.5625
9.5625
-0.065
-0.68%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.3475
9.3225
9.3225
-0.05
-0.53%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.3325
#N/A
9.3725
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.3825
0
0.00%
DEC ’21 ICE Dollar Index
$
112.935
111.705
112.895
1.669
1.50%
DE ’21 Light Crude
$ / BBL
89.67
88.18
88.7
-1.3
-1.44%
JA ’21 Light Crude
$ / BBL
88.53
87.09
87.6
-1.26
-1.42%
DEC ’22 ULS Diesel
$ /U GAL
3.6976
3.6264
3.6466
-0.0308
-0.84%
JAN ’23 ULS Diesel
$ /U GAL
3.5446
3.4881
3.508
-0.0316
-0.89%
DEC ’22 Gasoline
$ /U GAL
2.7053
2.6668
2.6844
-0.0128
-0.47%
JAN ’23 Gasoline
$ /U GAL
2.6009
2.566
2.5781
-0.0299
-1.15%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
178.925
0
0.00%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
180
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
151.4
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
154.9
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
83.3
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
87.2
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.67
20.67
20.67
-0.01
-0.05%
DEC ’22 Class III Milk
$ / CWT
19.22
19.09
19.09
0.03
0.16%
JAN ’23 Class III Milk
$ / CWT
19.05
19.05
19.05
0.15
0.79%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
