Morning report: Markets take a break from recession worries. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 2-6 cents
Soybeans up 5-14 cents; Soymeal up $3.00/ton; Soyoil mixed
Chicago wheat up 8-10 cents; Kansas City wheat up 7-12 cents; Minneapolis wheat up 11-13 cents
*Prices as of 6:50am CDT.
Good morning! Monday is Labor Day, so markets will be closed in observance of the holiday. As such, there will be no morning or afternoon newsletters on Monday. Enjoy the holiday weekend and we will be back in your inbox on Tuesday!
A big “thank-you” to everyone who came out to attend my marketing outlook session at the Farm Progress Show in Boone, Iowa this week! It was so wonderful to see you all there and to get a chance to visit with some of you after the presentation. Thank you again for stopping by!
For those of you who were intrigued by our 2023 Acreage Projections, you can find my article with our findings on our website. Even with rising fertilizer prices, corn appears to be the top choice for acreage intentions next year, with winter wheat also staging a surprising uptick in acres as planting season begins to ramp up for winter wheat growers. Check out our results article for all the top 2023 acreage insights!
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
Financial markets are taking a breather before this morning’s jobs report, and the ag commodities space is certainly grateful for that reprieve this morning. Corn futures traded $0.02-$0.06/bushel higher on a rally in the energy markets and the dollar weakening off of yesterday’s new 20-year high. Harvest is still a couple weeks out across most of the Corn Belt, so some of this morning’s price gains were also likely due to potential yield damage and end-of-the-year supply tightness.
Corn prices also had some bullish support from announcements about biofuel blending mandates for the next three years expected from the White House some time before the end of the year. “The switch to a multi-year target would be aimed at providing longer-term certainty to the refining and biofuels industries, which have battled nearly constantly over the annual mandates since they began more than a decade ago under the U.S. Renewable Fuel Standard (RFS),” writes Reuters’ Stephanie Kelly and Jarrett Renshaw on the issue.
“They’re trying to put together a proposal for 2023, 2024 and 2025 where once they put the proposals together, then they don’t have to go back in and they don’t have to change and modify the volumes,” said one of three anonymous sources on the topic.
Corn consumption for ethanol in July 2022 crept up from June 2022 volumes but continued to hover between the 444 million – 446-million-bushel range that has persisted through the Summer 2022 driving season.
A total of 445.7 million bushels of corn were processed for ethanol production during July 2022, a figure that was 0.3% higher than the previous month’s usage. More importantly, the volume was 1% lower than year ago values, underscoring consumers’ price sensitivity to high fuel costs.
But even with a lackluster month of corn consumption volumes, the ethanol industry continues to be a beacon of light for corn growers on the cash market. Marketing year to date corn volumes processed into ethanol are a staggering 6% higher than the same time a year ago as ethanol production finally emerges from the pandemic’s shadows.
Soybeans
Soybean prices rose $0.05-$0.13/bushel this morning on broad financial market optimism ahead of today’s jobs report. Many of the same market dynamics for the corn market were at play for soybeans this morning. November 2022 futures prices rose past the $14/bushel benchmark on the overarching sentiments at play in the markets this morning.
“Today’s job numbers matter for the macro environment and our commodity markets,” Peak Trading Research said in a note, as reported by Reuters. “The macro environment is a strong bearish headwind for commodity prices this week.”
Soyoil prices were mixed as Ukraine announced overnight that it had begun harvest progress on its sunflower and soybean crops. Corn harvest is also in its infancy stages in Ukraine. Ukraine was the world’s largest sunflower oil producer before the Russians invaded in February.
Domestic soybean crush rates saw bullish signs in the July 2022 reporting period. Yesterday’s monthly USDA oil crushings report saw July 2022 crush rates a 7.2-million-bushel upswing from the previous month, landing at 181.3 million bushels.
The news was a positive sign for domestic crush rates, which typically taper towards the end of the marketing year as supplies become increasingly scarce and expensive. Pre-report trade estimates had pegged yesterday’s July 2022 crush volume between 179.0 million – 181.7 million bushels with an average guess of 180.5 million bushels.
Yesterday’s result came in on the higher end of that range, which was a positive sign for demand so late in the marketing year. It marked the largest monthly crush rate since March 2022 and trailed the July 2020 reading of 184.5 million bushels as the second largest July crush volume on record.
Wheat
Wheat prices also rejoiced the weakening dollar overnight by rising $0.09-$0.13/bushel. Similar to corn and soybean markets, wheat prices were heavily influenced this morning by easing concerns about a looming recession in the broader financial markets.
Wheat futures also receive a boost from cuts to Ukrainian wheat sowing forecasts for next year as the Ukrainian Agrarian Council announced yesterday that the country’s planned acreage for next year could shrink by 30%-40% amid the ongoing Russian invasion.
Prior to the war’s outbreak earlier this winter, Ukraine was the world’s fourth largest wheat exporter.
Weather
It will be a warm day across much of the Heartland, according to NOAA’s short-range forecasts, though some pockets of the Upper Midwest and Mississippi River Valley could see more moderate mercury readings today.
Mostly clear skies are forecast for the Heartland today, though a band of light showers could pop up in the Central Plains and Upper Midwest overnight. The Eastern Corn Belt could see more showers on Sunday.
September is showing signs of another heatwave, despite my pleas to Mother Nature for cooler weather for my new lawn! The 6-10-day NOAA outlook is forecasting abnormally hot temperatures for upper two thirds of the continental U.S. through the first half of September. The Upper Midwest will see abnormal dryness during that time, while areas of the Southern Plains and Eastern Corn Belt could experience above average chances for precipitation.
Above average heat will continue to persist across the country in the 8-14 day NOAA outlook, though increased chances for moisture will begin to edge further north into the Central Plains during that time.
Financials
Markets are eager for today’s monthly jobs report. Economists are estimating that 318,000 jobs were added last month, which is expected to be lower than July’s showing of 528,000 new jobs. Most economists expect that the unemployment rate will stay at the current historical low of 3.5% in today’s report.
If the Labor Department’s data trends higher than that, expect stock markets to tumble lower. Inflation and unemployment are the Federal Reserve’s two primary metrics of economic success. The Fed’s recent interest rate hikes to curb inflation are likely to continue at an aggressive pace while inflationary pressures persist OR if unemployment figures begin to rise.
But if employment continues to hover at historically low levels in today’s report, it will likely be a sign to the Fed that the aggressive interest rate hikes need to continue.
S&P 500 futures were flat to 0.14% lower at $3,963.00 at last glance on concerns about today’s unemployment figures. Some recessionary fears subsided in the overnight trading session, as oil prices rallied, Treasury bond prices rose (yields fell), and the dollar backed off yesterday’s fresh 20-year highs.
What else I’m reading this morning on our website, FarmFutures.com:
Another day, another supply chain issue, writes executive editor Mike Wilson. Farmers who want to upgrade equipment may need to pay now – and wait.
Naomi Blohm examines if global recession fears are warranted and what the implications mean for commodity demand.
AgCareers.com’s Bonnie Johnson identifies five key trends at play in the ag workforce right now.
Tired of market volatility? AgMarket.Net’s Jim McCormick advises growers to brace for more of it as inflation, yield reductions and fertilizer shortages weight on the market.
Morning Ag Commodity Prices – 9/2/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.6375
6.5675
6.6275
0.045
0.68%
DEC ’22 CORN
$ / BSH
6.6475
6.565
6.6375
0.0575
0.87%
MAR ’23 CORN
$ / BSH
6.7075
6.625
6.695
0.0575
0.87%
MAY ’23 CORN
$ / BSH
6.7225
6.6475
6.7125
0.0525
0.79%
JUL ’23 CORN
$ / BSH
6.6775
6.605
6.6675
0.0525
0.79%
SEP ’23 CORN
$ / BSH
6.23
6.19
6.23
0.0325
0.52%
DEC ’23 CORN
$ / BSH
6.12
6.0675
6.105
0.015
0.25%
AR2 ’24 CORN
$ / BSH
6.165
6.15
6.15
-0.01
-0.16%
MAY ’24 CORN
$ / BSH
0
#N/A
6.19
0
0.00%
SEP ’22 SOYBEANS
$ / BSH
14.8
14.8
14.8
0.0725
0.49%
NOV ’22 SOYBEANS
$ / BSH
14.1
13.9175
14.08
0.1325
0.95%
JAN ’23 SOYBEANS
$ / BSH
14.1475
13.97
14.13
0.1325
0.95%
MAR ’23 SOYBEANS
$ / BSH
14.175
13.995
14.1625
0.1375
0.98%
MAY ’23 SOYBEANS
$ / BSH
14.185
14.025
14.175
0.13
0.93%
JUL ’23 SOYBEANS
$ / BSH
14.17
14.03
14.14
0.1075
0.77%
AUG ’23 SOYBEANS
$ / BSH
13.9175
13.865
13.9175
0.0475
0.34%
SEP ’23 SOYBEANS
$ / BSH
13.55
13.55
13.55
0.045
0.33%
NOV ’23 SOYBEANS
$ / BSH
13.44
13.325
13.4375
0.085
0.64%
AN2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.3825
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.3175
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
68.13
68.13
68.13
-0.39
-0.57%
OCT ’22 SOYBEAN OIL
$ / LB
65.85
65
65.83
0.56
0.86%
SEP ’22 SOY MEAL
$ / TON
455
451.2
455
3
0.66%
OCT ’22 SOY MEAL
$ / TON
427.9
421.9
425
2.4
0.57%
DEC ’22 SOY MEAL
$ / TON
420.3
414.2
417.6
2.3
0.55%
JAN ’23 SOY MEAL
$ / TON
415.2
409.1
413.2
3.2
0.78%
MAR ’23 SOY MEAL
$ / TON
407.3
401.4
405.1
3.3
0.82%
SEP ’22 Chicago SRW
$ / BSH
7.77
#N/A
7.755
0
0.00%
DEC ’22 Chicago SRW
$ / BSH
8.095
7.9625
8.05
0.1075
1.35%
MAR ’23 Chicago SRW
$ / BSH
8.26
8.13
8.22
0.1075
1.33%
MAY ’23 Chicago SRW
$ / BSH
8.3525
8.2325
8.3125
0.1025
1.25%
JUL ’23 Chicago SRW
$ / BSH
8.3675
8.245
8.3375
0.1075
1.31%
SEP ’23 Chicago SRW
$ / BSH
8.425
8.3025
8.4
0.1025
1.24%
DEC ’23 Chicago SRW
$ / BSH
8.54
8.4175
8.5175
0.1125
1.34%
SEP ’22 Kansas City HRW
$ / BSH
8.7525
8.7275
8.7525
0.1175
1.36%
DEC ’22 Kansas City HRW
$ / BSH
8.8225
8.7025
8.7825
0.1025
1.18%
MAR ’23 Kansas City HRW
$ / BSH
8.81
8.69
8.7725
0.0975
1.12%
MAY ’23 Kansas City HRW
$ / BSH
8.79
8.695
8.7725
0.1075
1.24%
JUL ’23 Kansas City HRW
$ / BSH
8.6875
8.605
8.6875
0.1225
1.43%
SEP ’23 Kansas City HRW
$ / BSH
8.6575
8.6575
8.6575
0.1025
1.20%
DEC ’23 Kansas City HRW
$ / BSH
8.645
8.645
8.645
0.0325
0.38%
SEP ’22 MLPS Spring Wheat
$ / BSH
8.74
#N/A
8.745
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9
8.85
8.98
0.115
1.30%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.125
8.9875
9.125
0.125
1.39%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.205
9.0725
9.205
0.12
1.32%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.235
#N/A
9.11
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
8.9725
#N/A
8.8725
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
8.885
0
0.00%
SEP ’21 ICE Dollar Index
$
109.6
109.13
109.36
-0.318
-0.29%
OC ’21 Light Crude
$ / BBL
89.35
86.35
88.04
1.43
1.65%
NO ’21 Light Crude
$ / BBL
88.86
85.93
87.58
1.36
1.58%
OCT ’22 ULS Diesel
$ /U GAL
3.6147
3.5211
3.5317
-0.0295
-0.83%
NOV ’22 ULS Diesel
$ /U GAL
3.5511
3.46
3.4636
-0.0348
-0.99%
OCT ’22 Gasoline
$ /U GAL
2.4904
2.3807
2.443
0.0577
2.42%
NOV ’22 Gasoline
$ /U GAL
2.4342
2.3309
2.3906
0.0529
2.26%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
183.15
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
184.35
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
142.8
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
148.575
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
91.95
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
83.775
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.64
19.58
19.58
-0.01
-0.05%
OCT ’22 Class III Milk
$ / CWT
19.87
19.53
19.87
0.35
1.79%
NOV ’22 Class III Milk
$ / CWT
20.41
20.28
20.28
0.04
0.20%
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