Morning report: Global production struggles amid a third consecutive La Ni?a season also offer price support this morning. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 1-6 cents
Soybeans up 8-15 cents; Soymeal up $3.50/ton; Soyoil up $0.76/lb
Chicago wheat up 7-8 cents; Kansas City wheat up 9-10 cents; Minneapolis wheat up 6-7 cents
*Prices as of 6:55am CDT.
Happy Friday! I’m gearing up for another week of market outlook presentations at Husker Harvest Days in Grand Island, Nebraska next week. I’ll be sharing market insights every day at 10am at the hospitality tent. Stop by and say hi!
Feedback from the Field updates! How does your farm’s crop conditions stack up against other farms around the country? Click this link to take the survey and share updates about your farm’s crop development. 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!
Corn
Corn prices rose $0.01-$0.06/bushel overnight, following gains in the energy complex higher. Gains were largely derived from growing uncertainties about Russia’s willingness to allow safe passage through the Black Sea for Ukrainian grain cargoes and lingering concerns about U.S. crop shortfalls.
France reported a continued decline in its corn conditions after battling severe heatwaves all summer, which could further limit supply availability in the Northern Hemisphere over the coming months. It marked the ninth consecutive week for declining crop ratings for the French corn crop.
The E.U. was the world’s fifth-largest corn exporter last year but will likely only be the seventh largest this year after the heat roasted its corn crop.
Soybeans
November 2022 soybean prices hovered just over a penny under the $14/bushel benchmark as the soybean futures market added $0.08-$0.13/bushel worth of gains during the overnight trading session. Gains were limited by increased sales by Argentine farmers after its government manipulated foreign currency exchange rates to incentivize more farmer sales earlier this week.
But looming La Ni?a forecasts, especially in the coming months, could limit production hopes for this year’s Brazilian and Argentine crops, even as the U.S. prepares to harvest a record crop in the coming weeks.
Wheat
Frost damage to the already drought-stressed Argentine wheat crop and ongoing concerns about the stability of the “Grain Initiative” agreement between Russia and Ukraine helped keep gains alive in the wheat market overnight. U.S. wheat prices traded $0.05-$0.08/bushel higher this morning, with the nearby Kansas City HRW contract rising past the $9/bushel benchmark.
Wheat prices were also impacted by India’s decision to restrict rice exports, which is likely to have complementary effects on wheat and corn prices. “India’s decision on rice is going to have inflationary impact and lift prices of wheat and corn as well,” a Sydney-based agricultural analyst told Reuters.
Overnight, Russia re-emphasized its criticisms of the “Grain Initiative,” the deal between Russia and Ukraine brokered by Turkey and the U.N. to increase grain shipments out of Ukrainian Black Sea terminals.
Russia’s foreign ministry commented overnight that the “Grain Initiative” has been executed “badly” and “cheated” Russia and hunger-stricken countries. The chief complaint stems from slow Russian wheat exports and relatively slow shipping paces to developing countries. Some of the overnight price strength in the wheat and corn markets can largely be attributed to growing uncertainty about Russia’s willingness to cooperate in the Black Sea.
But it’s worth noting that some grain shipments have departed from Ukraine to drought-stressed regions of Africa and the Middle East, despite Russia’s insistence otherwise. Even though the volumes may not be meeting Russia’s standards, it is an interesting battle Putin is picking here.
Putin’s own growers are resisting booking further sales as a strong ruble limits profit opportunity for them. Russia’s wheat exports are 22% lower than a year ago amid Ukrainian port reopening’s and greater international resistance towards dealing with Russian state-owned grain operators, especially as sanctions increase freight, financing, and insurance costs for Russian grain cargoes.
White House officials made a public statement on the matter yesterday, noting that “there is no indication the deal was unraveling.”
Weather
Hello, fall weather! Am I glad to see you! Today will be markedly cooler in the Upper Midwest and Central Plains as an overnight rain system continues to travel across the region, according to NOAA’s short-range forecasts. Up to an inch of accumulation is expected from Eastern Nebraska to Northern Wisconsin during the next 24 hours.
My yard got some rain overnight, which my little grass seedlings are very grateful to have!
Showers will continue to linger over the Plains and Mississippi River Valley over the next 24 hours, converging with systems in the Southeast over the Eastern Corn Belt by Sunday.
Yesterday, weather forecasters announced the persistent probability of La Ni?a weather patterns continuing in the Northern Hemisphere for a third consecutive season. Two consecutive La Ni?as are standard, but a third straight season is highly unusual.
La Ni?a means that surface water temperatures in the Pacific Ocean along the equator will be cooler than average and will shift global weather patterns accordingly. This points to dry weather persisting in the U.S. Plains and higher chances for excessive wetness in the Eastern Corn Belt this fall. It is also a contributing factor to excessive dryness in the Northern Hemisphere this summer and last winter in South America.
U.S. government forecasters announced yesterday that there is a 54% chance that La Ni?a will continue through January to March 2023. Those odds have fallen from previous forecasts of 91%, but still are a strong indicator that these unfavorable weather patterns will continue during peak South American corn and soybean production periods.
The 6-10-day NOAA outlook is forecasting above average chances for excessive heat for most of the country, except the lower half of the Mississippi River Valley and most of the Southeast, over the next 10 days. The mid-portion of the country will remain dry during that time, though parts of the drought-stressed Western Plains could see above average chances for rainfall during that time.
Above average heat will continue to persist across nearly all of the country except the West Coast in the 8-14 day NOAA outlook, Dry weather will continue to plague the Southern Plains during that time, though chances for rain are now trending higher for the Upper Midwest and Northern Plains through the middle of September.
Financials
Queen Elizabeth II’s death announcement yesterday helped detract some of the market focus from the European Central Bank’s historical decision to raise interest rates by 0.75% in the Euro Zone. But markets aren’t completely shuttering in the Queen’s absence, as European leaders are gathering for an emergency meeting to discuss options to handling energy market issues today.
Those dynamics are important for U.S. farmers because high natural gas prices in Europe are forcing fertilizer producers to cut back production on anhydrous ammonia, which is a necessary input for crop yields across the world.
Retail quotes for anhydrous ammonia prices in Illinois finally began rising on the natural gas squeeze, as reported by the Illinois USDA yesterday. Urea prices also gained some upward momentum at the retail level over the past couple weeks, while UAN quotes faded.
S&P 500 futures were trending 0.79% higher to $4,037.25 at last glance on continued assurance from the U.S. Federal Reserve and ECB that aggressive interest rate hikes would continue as long as inflation persists.
Yesterday, Brent crude oil prices dropped to their lowest level since Russia’s invasion of Ukraine. Prices rose today on a round of bargain buying.
What else I’m reading this morning on our website, FarmFutures.com:
AgMarket.Net’s Matt Bennett has two items on the watchlist for next week’s WASDE reports.
For farms operating multiple enterprises under one roof, here are eight tips to make both the farm and the side hustle(s) successful.
Mike Wilson shares insights about how the next generation may be shaking up the farm business world.
Bryce Knorr points out that corn shows better odds for rallies over the coming month.
Farm Futures’ 2023 Acreage Projections are live on our website. Spoiler alert: corn and winter wheat are poised to reign supreme next year.
Morning Ag Commodity Prices – 9/9/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.805
6.7875
6.805
0.06
0.89%
DEC ’22 CORN
$ / BSH
6.75
6.69
6.7125
0.0275
0.41%
MAR ’23 CORN
$ / BSH
6.7975
6.7375
6.7575
0.025
0.37%
MAY ’23 CORN
$ / BSH
6.805
6.75
6.7675
0.0225
0.33%
JUL ’23 CORN
$ / BSH
6.7575
6.7025
6.7225
0.025
0.37%
SEP ’23 CORN
$ / BSH
6.35
6.32
6.3275
0.01
0.16%
DEC ’23 CORN
$ / BSH
6.2075
6.1625
6.18
0.005
0.08%
AR2 ’24 CORN
$ / BSH
6.255
6.2525
6.255
0.0075
0.12%
MAY ’24 CORN
$ / BSH
5.5
#N/A
6.275
0
0.00%
SEP ’22 SOYBEANS
$ / BSH
0
#N/A
14.705
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
14.025
13.8725
13.975
0.115
0.83%
JAN ’23 SOYBEANS
$ / BSH
14.0725
13.93
14.0225
0.11
0.79%
MAR ’23 SOYBEANS
$ / BSH
14.1025
13.97
14.0575
0.11
0.79%
MAY ’23 SOYBEANS
$ / BSH
14.1375
14.01
14.0875
0.105
0.75%
JUL ’23 SOYBEANS
$ / BSH
14.125
13.99
14.075
0.0975
0.70%
AUG ’23 SOYBEANS
$ / BSH
13.8725
13.8725
13.8725
0.055
0.40%
SEP ’23 SOYBEANS
$ / BSH
13.545
13.505
13.545
0.09
0.67%
NOV ’23 SOYBEANS
$ / BSH
13.4275
13.33
13.3875
0.075
0.56%
AN2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.3425
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.2775
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
0
#N/A
68.86
0
0.00%
OCT ’22 SOYBEAN OIL
$ / LB
66.14
64.82
65.79
0.75
1.15%
SEP ’22 SOY MEAL
$ / TON
0
#N/A
427.8
0
0.00%
OCT ’22 SOY MEAL
$ / TON
412.9
410.1
412.1
3
0.73%
DEC ’22 SOY MEAL
$ / TON
409.8
406.8
408.7
2.8
0.69%
JAN ’23 SOY MEAL
$ / TON
407.7
404.5
406.6
2.7
0.67%
MAR ’23 SOY MEAL
$ / TON
403.2
399.7
402.2
2.7
0.68%
SEP ’22 Chicago SRW
$ / BSH
8.1
8.1
8.1
-0.005
-0.06%
DEC ’22 Chicago SRW
$ / BSH
8.4125
8.26
8.35
0.06
0.72%
MAR ’23 Chicago SRW
$ / BSH
8.5575
8.415
8.4975
0.06
0.71%
MAY ’23 Chicago SRW
$ / BSH
8.645
8.51
8.585
0.0575
0.67%
JUL ’23 Chicago SRW
$ / BSH
8.605
8.4925
8.55
0.055
0.65%
SEP ’23 Chicago SRW
$ / BSH
8.645
8.56
8.6225
0.075
0.88%
DEC ’23 Chicago SRW
$ / BSH
8.725
8.62
8.685
0.0475
0.55%
SEP ’22 Kansas City HRW
$ / BSH
0
#N/A
8.93
0
0.00%
DEC ’22 Kansas City HRW
$ / BSH
9.04
8.9025
8.995
0.065
0.73%
MAR ’23 Kansas City HRW
$ / BSH
9.0475
8.9325
9.005
0.0625
0.70%
MAY ’23 Kansas City HRW
$ / BSH
9.04
8.935
9.02
0.085
0.95%
JUL ’23 Kansas City HRW
$ / BSH
8.9125
8.79
8.9125
0.1
1.13%
SEP ’23 Kansas City HRW
$ / BSH
8.87
#N/A
8.79
0
0.00%
DEC ’23 Kansas City HRW
$ / BSH
8.91
#N/A
8.845
0
0.00%
SEP ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
8.795
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.08
8.9225
9.0525
0.07
0.78%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.185
9.095
9.1575
0.055
0.60%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.235
9.13
9.235
0.0575
0.63%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.2475
#N/A
9.175
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
8.9725
#N/A
8.915
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
8.9
8.9
8.9
-0.015
-0.17%
SEP ’21 ICE Dollar Index
$
109.55
108.35
108.895
-0.818
-0.75%
OC ’21 Light Crude
$ / BBL
85.26
82.71
85.19
1.65
1.98%
NO ’21 Light Crude
$ / BBL
84.75
82.23
84.69
1.62
1.95%
OCT ’22 ULS Diesel
$ /U GAL
3.5784
3.5201
3.552
0.0119
0.34%
NOV ’22 ULS Diesel
$ /U GAL
3.51
3.4528
3.4881
0.0174
0.50%
OCT ’22 Gasoline
$ /U GAL
2.3948
2.317
2.3842
0.0381
1.62%
NOV ’22 Gasoline
$ /U GAL
2.3515
2.2778
2.3393
0.0316
1.37%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
182.325
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
184.4
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
144.375
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
149.65
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
92.125
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
82.675
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.67
#N/A
19.79
0
0.00%
OCT ’22 Class III Milk
$ / CWT
20.65
20.49
20.49
-0.1
-0.49%
NOV ’22 Class III Milk
$ / CWT
21.18
21.18
21.18
0.09
0.43%
