Afternoon report: Wheat prices finish Monday’s session mostly lower
Record-breaking temperatures are possible in the Southern Plains this week, and hot, dry weather was prominent today across large portions of the allowed modest gains for corn and soybean prices after a round of technical buying. Wheat prices failed to follow suit, with mixed but mostly lower results today as traders finished squaring positions ahead of the next World Agricultural Supply and Demand Estimatesreport from USDA, out tomorrow morning.
Not much rain is expected for the central U.S. between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The Plains and western Corn Belt are unlikely to see any measurable moisture during this time, while parts of the eastern Corn Belt could receive trace amounts up to 0.25″. NOAA’s 8-to-14-day outlook expects hotter-than-normal conditions for all of the Midwest and Plains between July 18 and July 24, with seasonally dry weather persisting across the central U.S. next week.
On Wall St., the Dow tilted 81 points lower in afternoon trading to 31,257 as investors await the next batch of corporate earnings reports that will come out later this week. Energy futures were mixed. Crude oil eased 0.5% lower to stay just above $104 per barrel. Diesel jumped 2.5 higher, with gasoline firming 0.5%. Volatile natural gas prices climbed more than 6% higher. The U.S. Dollar firmed significantly.
Last Friday, commodity funds were net buyers of all major grain contracts, including corn (+20,000), soybeans (+12,000), soymeal (+5,500), soyoil (+3,000) and CBOT wheat (+18,500).
Corn
Corn prices started today’s session with strong overnight gains, which mostly evaporated by the close. Still, prices made modest inroads of around 0.25% after a bit of technical buying. July futures added 3 cents to $7.8125, while September futures picked up 1.75 cents to $6.35.
Corn basis bids were steady to mixed across the central U.S. to start the week, moving as much as 5 cents higher at an Ohio elevator and as much as 12 cents lower at an Illinois ethanol plant on Monday.
Corn export inspections improved to 36.8 million bushels last week. That was good enough to stay toward the higher end of trade estimates, which ranged between 28.5 million and 43.3 million bushels. China was the No. 1 destination, with 15.9 million bushels. Cumulative totals for the 2021/22 marketing year are still well behind last year’s pace, meantime, with 1.938 billion bushels.
Prior to the next crop progress report from USDA, out later this afternoon, analysts expect to see corn quality improve a point from a week ago, with 65% of the crop rated in good-to-excellent condition through July 10. Individual trade guesses ranged between 63% and 67%.
The Philippines purchased as much as 2.4 million bushels of corn, likely sourced from South America, in an international tender that recently closed. Additional animal feed wheat purchases totaling 2.2 million bushels were also made, which was likely sourced from Australia.
Preliminary volume estimates were for 352,425 contracts, shifting well above Friday’s final count of 238,533.
Soybeans
Soybean prices followed a similar pattern as corn prices after starting Monday’s session with strong overnight gains that slowly eroded as the day wore on. Thanks to a net round of technical buying, prices closed around 0.4% higher today. July futures added 6.75 cents to $16.37, with August futures up 5.5 cents to $15.1875.
Soybean basis bids were mostly steady across the Midwest on Monday but did jump 15 cents higher rat an Illinois river terminal while eroding 15 cents lower at an Iowa river terminal today.
Soybean export inspections were largely disappointing, falling moderately lower week-over-week and coming in at 13.1 million bushels. That was also below the entire range of analyst estimates, which were between 13.8 million and 21.1 million bushels. China was the No. 1 destination, with 2.7 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 1.917 billion bushels.
Ahead of this afternoon’s crop progress report from USDA, analyst think the agency will show soybean quality ratings improving a point from a week ago, with 64% of the crop in good-to-excellent condition through July 10.
Brazil’s Abiove slightly raised its estimates for the country’s 2022 soybean production, which it moved to 4.622 billion bushels. Of that total, around 2.822 billion bushels is expected to enter the export market. Brazilian soymeal production also increased slightly, to 37 million metric tons. Around half of that total (18.5 MMT) will be exported.
Preliminary volume estimates were for 133,036 contracts, inching slightly above Friday’s final count of 131,796.
Wheat
Wheat prices continue to get hammered by harvest pressure, succumbing to another round of technical selling today. Most contracts lost between 3.5% and 4%. September Chicago SRW futures lost 36.25 cents to $8.5525, September Kansas City HRW futures fell 32 cents to $9.1375, and September MGEX spring wheat futures dropped 35 cents to $9.5675.
Wheat export inspections reached 11.4 million bushels last week. That was on the lower end of analyst estimates, which ranged between 9.2 million and 16.5 million bushels. Mexico topped all destinations, with 3.2 million bushels. Cumulative totals for the 2022/23 marketing year are running slightly behind last year’s pace so far, with 70.6 million bushels.
Ahead of this afternoon’s weekly crop progress report from USDA, analysts think the agency will show slight improvements to spring wheat crop quality, with 67% of the crop rated in good-to-excellent condition through Sunday. Analysts also expect to see winter wheat harvest progress move from 54% a week ago up to 68% through July 10.
Russian consultancy Sovecon estimates that the country will export around 84.5 million bushels of wheat in July. That would more than double June’s tally and would be the largest monthly total since February, if realized. Russia is the world’s No. 1 wheat exporter.
Ukraine began its 2022/23 marketing year on the first of July, and its grain export pace is down 30% so far, according to the country’s agriculture ministry. Amazingly, grain exports in 2021/22 managed to firm 8.5% to 48.5 million metric tons due to strong shipments prior to the Russian invasion that began in late February.
Taiwan issued an international tender to purchase 1.6 million bushels of grade 1 milling wheat from the United States that closes on Wednesday. The grain is for shipment between late August and mid-September.
Preliminary volume estimates were for 92,427 CBOT contracts, moving slightly above Friday’s final tally of 85,789.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
800
780.75
781.25
3
22-Sep
667
634.25
637
1.75
Soybeans
22-Jul
1660
1637
1641
6.75
22-Sep
1455
1419.75
1423.5
6.75
Soymeal $/ton
22-Aug
440
431.7
432.9
0.8
Soyoil cents/lb
22-Aug
64.75
62.83
63.72
1.13
Wheat $/bushel
22-Jul
888
849.25
843.75
-35.5
22-Sep
940.25
853.75
856.5
-36.25
KC Wheat
22-Jul
968.5
925.5
920.25
-23.25
22-Sep
998.25
907.5
915.25
-32
MPLS Wheat
22-Jul
1012.25
1012.25
968.25
44
22-Sep
1044.5
951.75
991.75
-35
Live Cattle cents/lb
22-Jun
136.425
132.875
136.3
2.35
Feeder Cattle cents/lb
22-Sep
177.7
173.15
177.4
2.675
Lean Hogs cents/lb
22-Aug
110.425
106.45
108.55
-0.625
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Aug
105.05
100.89
103.86
-0.93
Diesel
22-Jul
3.803
3.6274
3.7748
0.1019
Unleaded Gasoline $/gallon
22-Jul
3.48
3.3648
3.4588
0.0117
Natural Gas
22-Sep
6.59
6.16
6.33
0.363
U.S. Dollar Index
22-Sep
108.015
106.685
107.855
1.034
Gold $/ounce
22-Aug
1743
1730.8
1736.7
-3.9
Copper
22-Jul
3.4785
3.398
3.4355
-0.0965
Fertilizer Swaps
(as of 07/08)
DAP Tampa-index
1,080.0
-10
DAP-New Orleans
876.3
8.27
Urea-New Orleans
559.4
-11.02
Urea-Middle East
730.0
-10
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
534.6
-30.86
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