Afternoon report: Soybeans also firm on Wednesday, with corn near even in a choppy session.
Grain prices were mixed but mostly higher in midweek trading. Wheat led the charge with some contracts trading over 3% higher today on reports that India may restrict exports amid a drought-stressed season – that country heavily relies on local production to meet its ample domestic needs. Soybeans added 0.5%, while corn failed to hold onto moderate overnight gains, finishing today’s session with modest losses.
A large section of the Corn Belt, stretching from Nebraska eastward through Ohio, is likely to gather at least 1″ additional rains between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook anticipates seasonally wet weather for the Northern Plains and upper Midwest between May 11 and May 17, with warmer-than-normal conditions likely for most areas east of the Mississippi River.
On Wall St., the Dow trended 42 points in afternoon trading to 33,171 as investors mulled over the Federal Reserve’s decision to hike rates by half a percentage point, a move that was highly anticipated. Energy prices jumped substantially higher, with crude oil up more than 5.5% to $108 per barrel as traders continue to watch whether the European Union will ultimately decide to put bans on Russian supplies. Gasoline rose 4.5%, with diesel up 4%. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of soyoil (+1,000) contracts but were net sellers of corn (-12,000), soybeans (-7,500), soymeal (-3,500) and CBOT wheat (-3,500).
NOTE: Once again this season, Farm Futures will be collecting and regularly sharing farmer anecdotes in our Feedback from the Field series. The first round is already out – click here to see what’s happening around farm country and learn how you can participate.
Corn
Corn prices trended moderately higher overnight but were unable to keep that forward momentum going today. Traders will continue to monitor the next round of export data (out tomorrow) and planting progress reports (out next Monday) to inform where prices will head next. Ukraine’s planting and export challenges remain a big factor as well. Today, May futures slid 2.25 cents lower to $7.9850, while July futures held steady at $7.93.
Corn basis bids were steady at most Midwestern locations on Wednesday but did tilt 3 to 4 cents higher at two ethanol plants today.
Ethanol production firmed slightly for the week ending April 29 but remained below the 1-million-barrel-per-day benchmark for the fourth consecutive week after posting a daily average of 969,000 barrels per data from the U.S. Energy Information Administration released earlier today. Ethanol stocks were steady, hovering near a 15-week low.
Ahead of USDA’s next export report, out Thursday morning and covering the week through April 28, analysts expect to see another big round of corn sales, with trade guesses ranging between 47.2 million and 94.5 million bushels.
Argentina’s agriculture ministry estimates that farmers have sold approximately 933 million bushels of their 2021/22 corn crop. The Buenos Aires grains exchange pegs this season’s production at 1.929 billion bushels.
Taiwan purchased 2.2 million bushels of corn, likely sourced from South Africa, in an international tender that closed earlier today. The grain is for shipment between late July and early August.
Preliminary volume estimates were for 211,343 contracts, moving moderately below Tuesday’s final count of 264,988.
Soybeans
Soybean prices made moderate inroads on some technical buying, with rising wheat and energy prices lending some support. Two big questions still loom – what is South America’s true production potential as its harvest moves closer to completion, and how many acres will U.S. farmers plant this year? May futures rose 10.25 cents to $16.6925, with July futures up 10 cents to $16.4050.
Soybean basis bids were steady to firm on Wednesday after climbing 5 to 20 cents higher at four Midwestern processors and trending 5 cents higher at an Ohio river terminal today.
Prior to tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 22.0 million and 59.7 million bushels for the week ending April 28. Analyst also expect to see soymeal sales come in between 100,000 and 335,000 metric tons, plus up to 30,000 MT in soyoil sales.
Argentina’s agriculture ministry is estimating that farmers have sold approximately 518 million bushels of their 2021/22 soybean crop so far. That’s 14% below last year’s pace so far. The country’s Buenos Aires grains exchange estimates that total soybean production will reach 1.543 billion bushels this season.
With grain prices so high, it almost feels a little paradoxical that so many farmers are stressed right now. But volatile market shifts and high input prices have made the stakes higher than they’ve been in a long time. “If you are struggling with how to manage through this volatile time, I think you will find comfort in a marketing tool that has been around for nearly 40 years: the PUT,” argues Luke Williams, ag risk management advisor with Advance Trading Inc. Williams makes his case for this potentially valuable marketing tool in a recent Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 118,096 contracts, sliding slightly below Tuesday’s final count of 124,694.
Wheat
Wheat prices shot up on worries that India will restrict exports, putting limited global supplies in further disarray. July Chicago SRW futures rose 30.5 cents to $10.76, July Kansas City HRW futures rose 30.5 cents to $11.2325, and July MGEX spring wheat futures added 23 cents to $11.7850.
Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 3.7 million and 16.5 million bushels for the week ending April 28.
And ahead of an official Statistics Canada report out Friday morning, analysts expect that agency to report all-wheat stocks at 383.7 million bushels through the end of March, which would be a year-over-year decline of nearly 36%, if realized.
Russian consultancy Sovecon estimates that the country will export 84.5 million bushels of wheat in April, which would be a month-over-month increase of 4.5%, if realized. These numbers also suggest that Russian grain exports have not been significantly impacted by its ongoing invasion of Ukraine. Russia is the world’s No. 1 wheat exporter.
Meantime, Ukrainian analyst APK-Inform reports that the country’s total grain exports in April fell to 923,000 metric tons, versus 2.8 million MT a year ago. APK-Inform estimates that Ukraine only exported 4.7 million bushels of wheat last month, plus another 30.3 million bushels of corn.
Tunisia issued an international tender to purchase 3.7 million bushels of soft wheat and 3.4 million bushels of animal feed barley from optional origins that closes tomorrow. The grain is for shipment in June and July.
South Korea purchased 1.8 million bushels of wheat from the United States in an international tender that closed earlier today. The grain is for shipment between mid-June and mid-July.
Preliminary volume estimates were for 81,088 CBOT contracts, tracking moderately higher than Tuesday’s final count of 59,996.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
808.75
796
798.5
-2.25
22-Jul
803.75
789.5
794.25
0
Soybeans
22-May
1672.75
1652.5
1669.75
10.25
22-Jul
1644.5
1622
1640.5
10
Soymeal $/ton
22-Jul
427.2
417.5
418.2
-6
Soyoil cents/lb
22-Jul
82.73
79.82
82.43
1.97
Wheat $/bushel
22-May
1069.75
1042.25
1066
32.25
22-Jul
1089
1042.25
1076.5
30.5
KC Wheat
22-May
1121
1113.25
1112.5
31.5
22-Jul
1134
1091.5
1123.25
30.5
MPLS Wheat
22-May
1172.5
1172.5
1173.25
20
22-Jul
1183
1154.75
1177.25
23
Live Cattle cents/lb
22-Apr
136
134.55
134.925
-0.4
Feeder Cattle cents/lb
22-May
177.5
174.65
176.225
-0.05
Lean Hogs cents/lb
22-Jun
105.5
102.725
105.25
3.05
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
108.55
102.95
108.54
6.13
Diesel
22-May
4.2461
4.0952
4.2349
0.1522
Unleaded Gasoline $/gallon
22-May
3.6741
3.54
3.6724
0.1712
Natural Gas
22-Jul
8.542
7.815
8.505
0.48
U.S. Dollar Index
22-Jun
103.67
102.615
102.63
-0.866
Gold $/ounce
22-Jun
1884.2
1861.1
Copper
22-May
4.336
4.24
4.336
0.065
Fertilizer Swaps
(as of 04/29)
DAP Tampa-index
1,175.0
-7.5
DAP-New Orleans
989.3
-52.36
Urea-New Orleans
738.6
-99.21
Urea-Middle East
810.0
-140
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
0
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