Afternoon report: Corn, soybeans and wheat all trend higher in Wednesday’s session
Grain prices have been mostly battered in recent sessions and have fallen enough to attract some bargain buying and reassess the latest supply and demand fundamentals on Wednesday. Wheat contracts were the biggest benefactors today, with some contracts up as much as 3%. Soybeans marched another 1.25% higher, while corn saw moderate increases of around 0.5%.
The latest 72-hour cumulative precipitation map from NOAA shows most of the Midwest and Plains will see at least some measurable rain and/or snow between Thursday and Monday, with a band stretching from Oklahoma into northern Arkansas and southern Missouri set to deliver 2″ or more during this time. Further out, NOAA’s new 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between December 14 and December 20, and cooler-than-normal temperatures are also likely during this time.
On Wall St., the Dow was near even at 33,586 as investors are still weighing the possibility of a recession, especially if the Federal Reserve maintains its current aggressive interest rate approach. Energy futures continued to fade, with crude oil down another 2.5% this afternoon to $72 per barrel on larger-than-expected domestic supplies. Diesel dropped 4.25%, with gasoline down around 3%. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of soybeans (+6,000) and soymeal (+5,000) contracts but were net sellers of corn (-4,000), soyoil (-5,000) and CBOT wheat (-5,000).
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Corn prices trended moderately higher on a round of technical buying that was largely fueled by spillover strength from other commodities. December futures picked up 2.25 cents to $6.2775, while March futures added 5 cents to $6.4225.
Corn basis bids were mostly steady across the central U.S. on Wednesday but did trend 6 cents higher at an Ohio elevator while dropping 5 cents at an Illinois river terminal and 15 cents at an Iowa processor today.
Ethanol production took a sharp turn higher for the week ending December 2, with a daily average of 1.077 million barrels, per the latest data from the U.S. Energy Information Administration out earlier today. That’s the best weekly tally since last December. Stocks increased 1.4% to a new total of 23.3 million barrels.
Ahead of tomorrow morning’s export report from USDA, analysts offered a wide range of trade guesses regarding possible corn exports, from 11.8 million all the way up to 42.3 million bushels for the week ending December 1.
Brazil’s Anec estimates that corn exports will reach 213.8 million bushels in December. If realized, that would bring cumulative totals for 2022 to a record-breaking 1.677 billion bushels.
Taiwan has purchased 5.1 million bushels of animal feed corn from Brazil in two private deals that closed earlier today. The grain is for shipment starting in late January.
South Korea purchased 2.6 million bushels of animal feed corn, likely sourced from South America or South Africa, in a private deal that closed on Tuesday. The grain is for shipment between January 17 and February 17.
Grain traveling the nation’s railways totaled another 26,212 carloads last week. That brings cumulative totals in 2022 to 1.074 million carloads, which is down 4.1% year-over-year.
Preliminary volume estimates were for 197,508 contracts, shifting moderately below Tuesday’s final count of 245,124.
Soybean prices continued their strong performance on Tuesday after capturing another set of double-digit gains as traders continue to assess the easing of Chinese covid restrictions and overly dry weather in Argentina and parts of Brazil. January futures rose 18.5 cents to $14.7350, with March futures up 17 cents to $14.7850.
Soybean basis bids were steady to mixed across the central U.S. on Wednesday, trending as much as 10 cents higher at an Ohio elevator and as much as 5 cents lower at an Illinois river terminal today.
Ahead of Thursday morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 22.0 million and 53.3 million bushels for the week ending December 1. Analysts also expect to see 150,000 to 400,00 metric tons of soymeal sales, plus up to 10,000 MT of soyoil sales.
China’s soybean imports in November were down 14% year-over-year, with 270.1 million bushels last month. Logistical slowdowns were largely to blame for the slowdown. Cumulative totals through the first 11 months are down 8.1% from year-ago levels, with 2.959 billion bushels. China is by far the world’s top soybean importer.
Brazil’s Anec estimates that the country’s soybean exports will reach 62.5 million bushels in December. Cumulative totals for 2022 may end up trailing last year’s pace by 9.8%, with estimates of 2.869 billion bushels. Anec’s also expects to see soymeal exports totaling 1.54 million metric tons this month.
South Korea issued an international tender to purchase around 918,000 bushels of food-quality GMO-free soybeans from optional origins that closes on December 13. The grain is for arrival between December 2023 and June 2024.
Preliminary volume estimates were for 302,084 contracts, moving moderately ahead of Tuesday’s final count of 240,278.
Wheat prices benefited from a round of bargain buying – although they have been on a pretty consistent downward slide since early November (with a handful of exceptions, including today’s action). March Chicago SRW futures climbed 20.5 cents to $7.4950, March Kansas City HRW futures rose 19.25 cents to $8.4925, and March MGEX spring wheat futures added 8 cents to 9.04.
Prior to tomorrow morning’s USDA export report, analysts are anticipating that wheat sales came in between 5.5 million and 14.7 million bushels for the week ending December 1.
Russian consultancy Sovecon has slightly raised its forecast for the country’s 2022/23 wheat exports based on current shipment trends, reaching 1.613 billion bushels. “Current rapid exports are based on active sales since early October when Russian wheat started to regain its competitive edge,” according to Sovecon. Exports between October and December are expected to improve 33% year-over-year. Russia is the world’s No. 1 wheat exporter.
Japan hopes to purchase 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley when it holds a simultaneous buy-and-sell auction on December 14. If purchases are made, that grain will be for arrival by March 9.
Taiwan purchased around 1.6 million bushels of milling wheat sourced from the United States in a tender that closed earlier today. The grain is for shipment between January 25 and February 8.
Thailand purchased 2.4 million bushels of feed wheat from optional origins in a deal that closed earlier today. The grain is for shipment between early February and early March.
Preliminary volume estimates were for 75,269 CBOT contracts, tracking slightly lower than Tuesday’s final count of 82,810.
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