Afternoon report: Wheat and corn trend lower on Thursday, while soybeans inch slightly higher
Grain prices were lightly mixed as traders squared positions ahead of a highly anticipated quarterly stocks report from USDA, out Friday morning. (For some top-notch analysis on this, be sure to read Farm Futures grain market analyst Jacqueline Holland’s sneak peek here.) Wheat prices trended moderately lower, corn faced small losses and soybeans finished Thursday’s session with modest gains.
NOAA’s latest 72-hour cumulative precipitation map shows severe rainfall totals for the Mid-Atlantic and moderate moisture likely for the Rocky Mountain region between Friday and Monday, but the Midwest and Plains are doubtful to see any additional rains during this time. The agency’s 8-to-14-day outlook predicts more of the same for the central U.S., with seasonally warm, dry weather for the Midwest and Plains between October 6 and October 12.On Wall St., the Dow tumbled 585 points lower to 29,097 after losses from Apple triggered a broader market selloff. Investors also remain quite skittish over high inflation and rising interest rates and will probably need to see signs of a reversal of current conditions to fuel a sustained market rally. Energy futures were also in the red this afternoon, with crude oil down around 0.6% to $81 per barrel. Diesel dropped 1%, while gasoline faded 2.5% lower. The U.S. Dollar softened moderately.
On Wednesday, commodity funds were net buyers of corn (+2,500), soybeans (+2,000) and CBOT wheat (+8,500) contracts but were net sellers of soymeal (-1,000) and soyoil (-1,500).
Corn
Corn prices eased slightly lower on Thursday, partly due to spillover weakness from other commodities. Losses were minimized by a healthy dose of export sales data from USDA this morning and ongoing production and export challenges in Ukraine. December futures dropped 1 cent to $6.66950, with March futures down half a penny to $6.76.
Corn basis bids were steady to mixed after trending 5 to 10 cents higher at three Midwestern facilities while dropping 2 to 25 cents at half a dozen other locations on Thursday.
Corn sales found 26.5 million bushels of old and new crop sales last week. That was toward the higher end of analyst estimates, which ranged between 9.8 million and 31.5 million bushels. Cumulative bushels for the young 2022/23 marketing year are now at 63.0 million bushels. Corn export shipments were also solid for this time of year, with 22.6 million bushels. Mexico, China, Japan, El Salvador and Venezuela were the top five destinations.
South Korea purchased 2.6 million bushels of animal feed corn, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival in early January.
Preliminary volume estimates were for 267,553 contracts, trending moderately above Wednesday’s final count of 214,930.
Soybeans
Soybean prices barely stayed in the green on Thursday after moderate gains mostly evaporated as today’s session wore on. November futures picked up 1.25 cents to $14.10, while January futures added 3.25 cents to $14.1950.
Soybean basis bids were steady to weak after tumbling 65 cents lower at an Iowa processor and dropping 2 to 25 cents across four other Midwestern locations on Thursday.
Soybean exports saw old crop sales climb to 36.9 million bushels. That was better than the entire range of trade guesses, which came in between 9.2 million and 31.2 million bushels. New crop sales faced modest net reductions of 1.1 million bushels. Cumulative sales for the 2022/23 marketing year are now at 44.6 million bushels. Soybean export shipments reached 9.9 million bushels last week. Japan, China, Mexico, Taiwan and Costa Rica were the top five destinations.
How are your crops looking right now? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
Brazil’s Department of Rural Economy (Deral) reports that the state of Paran? has a 2022/23 soybean production potential of around 790 million bushels, which is steady from its prior estimate in August. Paran? is Brazil’s third-largest soybean production state.
Meanwhile, several Brazilian soybean processors are temporarily ceasing operations after crushing margins turned negative amid weak biodiesel demand and ample soyoil inventories at those sites. Abiove told Reuters yesterday that stoppages are not uncommon when soyoil prices drop while soybean prices stay high (which hurts margins).
“This year’s Brazilian crop is important because global stocks are so tight,” according to Farm Futures grain market analyst Jacqueline Holland. “Global soybean supplies, as measured by the stocks-to-use ratio, are expected to grow 0.8% by the end of the 2022/23 marketing year to 18.1%. But this global metric continues to linger well below the previous high of 23.1% set at the end of the 2018/19 marketing campaign, representing only 6% supply growth between the two periods.” Holland investigates Brazilian production potential and much more in her latest E-corn-omics blog – click here to read it now.
China has been offering regular auctions of its state soybean reserves since March, notes Naomi Blohm, senior market adviser with Stewart Peterson. However, the timing is interesting for the latest sale, to be held on Friday, Blohm adds. “Are they moving soybeans in storage to make room for their upcoming harvest, or are they moving soybeans out of end-user necessity?” she says. “My hunch is that overall, China is potentially quite low on physical soybean supplies and has ‘held off selling’ what they had in state-owned storage for as long as possible. Finally, now their end users have screamed, ‘Hurry up and release some beans!'” Click here for more of Blohm’s analysis in the latest Ag Marketing IQ blog.
Preliminary volume estimates were for 273,812 contracts, tracking slightly above Wednesday’s final count of 253,366.
Wheat
Wheat prices incurred moderate losses after a round of technical selling on Thursday after a lackluster set of export data was released this morning, and as traders finished squaring positions ahead of Friday morning’s USDA quarterly grain stocks report. December Chicago SRW futures dropped 8 cents to $8.9525, December Kansas City HRW futures lost 10.5 cents to $9.6550, and December MGEX spring wheat prices fell 6.25 cents to $9.6625.
Wheat exports saw 10.3 million bushels of old crop sales but suffered a 1.1-million-bushel reduction in new crop sales, for a balance of 9.2 million bushels. That was on the lower end of analyst estimates, which ranged between 6.4 million and 18.4 million bushels. Cumulative totals for the 2022/23 marketing year reached 261.9 million bushels. Wheat export shipments were more robust, with 22.8 million bushels. China, Chile, Nigeria, Mexico and Japan were the top five destinations.
Kazakhstan’s agriculture ministry reports that the country is expecting a 2022 wheat harvest of around 496 million bushels and may export around 257.2 million bushels during the current marketing year.
As expected, Japan purchased 2.3 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Of the total, 46% was sourced from the U.S. The grain is for shipment between October 21 and November 20.
Taiwan purchased 1.9 million bushels of milling wheat sourced from the United States in a tender that closed earlier today. The grain is for shipment in November.
Preliminary volume estimates were for 62,466 CBOT contracts, sliding below Wednesday’s final count to 72,568.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
676.75
666
669.5
-1
23-Mar
683
673.25
676
-0.5
Soybeans
22-Nov
1423.75
1403.25
1410.75
1.25
23-Jan
1432.25
1414
1420.5
3.25
Soymeal $/ton
22-Dec
416.7
406.8
407.2
-5.5
Soyoil cents/lb
22-Dec
64.09
61.63
63.86
1.68
Wheat $/bushel
22-Dec
914.5
887.75
896.25
-8
23-Mar
926.25
901
908
-7.25
KC Wheat
22-Dec
986
959.5
966.75
-10.5
23-Mar
982
956.75
964.25
-8.75
MPLS Wheat
22-Dec
980.75
960.75
966
-6.25
23-Mar
984.5
964.5
970.25
-7.25
Live Cattle cents/lb
22-Oct
144.35
142.725
144.225
1.175
Feeder Cattle cents/lb
22-Oct
177.725
174.45
177.7
2.7
Lean Hogs cents/lb
22-Dec
77.925
75.55
75.85
0.025
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Nov
82.94
80.34
81.42
-0.73
Diesel
22-Oct
3.4954
3.3831
3.4036
-0.0458
Unleaded Gasoline $/gallon
22-Oct
2.5756
2.4979
2.5118
-0.0661
Natural Gas
22-Nov
7.37
6.865
7.144
-0.056
U.S. Dollar Index
22-Dec
113.72
112.03
112.235
-0.273
Gold $/ounce
22-Nov
1667.5
1644.5
1657.4
-2.9
Copper
22-Oct
3.449
3.353
3.4485
0.065
Fertilizer Swaps
(as of 09/16)
DAP Tampa-index
765.0
-52.5
DAP-New Orleans
837.8
-5.51
Urea-New Orleans
734.1
25.9
Urea-Middle East
865.0
-20
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
556.7
16.53
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