Morning report: Corn, soy, wheat post moderate gains on improving broad economic sentiments, weaker dollar. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 2-6 cents
Soybeans up 11-13 cents; Soymeal up $99.90/ton; Soyoil up $0.56/lb
Chicago wheat up 7-8 cents; Kansas City wheat up 7-8 cents; Minneapolis wheat up 8 cents
*Prices as of 6:50am CDT.
Feedback from the Field updates! Our latest farmer updates were published on our website on Tuesday! Check out this article for all the latest on growing conditions around the country – which remain highly variable.
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
Markets were largely quiet overnight, likely awaiting the results of tomorrow’s WASDE reports, which are expected to provide USDA’s first look at farmer-surveyed yield estimates. The anticipation is benefiting farmers though, as Chicago corn futures rose $0.02-$0.04/bushel this morning, pulling futures prices for the 2023 crop closer to the $6/bushel benchmark on worries about a smaller corn crop.
A weaker dollar and dry weather in the Western Corn Belt fueled the morning’s gains, which were also supported by moderate increases in the energy markets. Some outside support also lent a hand after yesterday’s better than expected Consumer Price Index (CPI) report pointed to cooling inflationary pressures.
“The macro mood got a boost from yesterday’s cooler-than-expected … July CPI data,” Peak Trading Research said in a note. “Weather is still a huge X-factor, especially for soybeans.”
The Rosario Grains Exchange forecasts Argentina’s 2022/23 corn harvest at 2.17 billion bushels (55MMT). Soybean production is predicted at 1.73 billion bushels (47MMT). USDA’s current forecasts for new crop Argentina corn and soybean production stand at 2.17 billion bushels and 1.87 billion bushels, respectively, so the estimates are not likely to trigger significant chances of revisions in tomorrow’s USDA reports.
But this report does share some interesting insights about the obstacles facing Argentine growers as the new crop year approaches. The Rosario Exchange expects that soybean acreage will increase this year by 4.3%. Those gains are likely to come directly from corn acreage, which is forecast to drop 4.7% from last year.
The exchange noted that the presence of another La Ni?a weather pattern during planting season could disrupt the country’s ambitious goals for 2022/23 soybean and corn production.
Soybeans
Recent flash sale announcements are keeping the bulls alive in the soybean market this morning. Futures prices traded $0.10–$0.13/bushel higher during the overnight trading session thanks to lingering concerns about dry weather across the Heartland over the next week as peak pod fill continues.
Similar to corn, higher oil prices and easing inflation optimism helped to prop up gains in the soybean market this morning.
Soybeans are likely to see the biggest amount of price volatility in tomorrow’s reports. USDA’s yield estimates will provide the first look at supply potential for the 2022/23 marketing year. Current supply volumes are already tight, and demand has not showed much responsiveness to higher prices – meaning that it keeps growing.
Any downward yield or acreage revisions in tomorrow’s report should keep the bullish sentiments alive in the soybean market. A larger than expected yield would risk a little bearish price activity but considering how rapid usage rates are being reported for U.S. soybeans, I think the demand forces will be enough to keep supply-driven losses at a minimum in tomorrow’s trading session.
Wheat
Rocky seas and poor weather conditions slowed Ukrainian grain shipping paces in the Black Sea overnight. “A ship whose departure from Chornomorsk Port for grain shipment was planned for today could not set sail due to bad weather and sea conditions,” Turkey’s defense ministry announced early this morning.
That factor, paired with a weaker dollar and easing inflation worries, lifted U.S. wheat prices $0.06-$0.08/bushel higher this morning. Rising temperatures forecast for the Northern Plains added a premium to spring wheat futures on the Minneapolis Exchange this morning.
The better-than-expected CPI findings yesterday restored some confidence in the economy, which led investors to pull out of safe-haven assets in favor of products with higher returns. The dollar is one of those safe-haven assets, so it should come as no surprise that yesterday’s stock market rally triggered a 1% drop in the dollar during yesterday’s trading session.
But that’s good news for U.S. wheat producers, especially as peak export season intensifies over the next month.
Weather: Temperature highs will continue to hover in the 80s today for the Great Lakes region and Upper Midwest, according to NOAA’s short-range forecasts. While that will hopefully stave off drought worries for top soybean-producing states, blistering temperatures in the Plains and Western Corn Belt could damage yield prospects for corn and soybean crops in that region.
It will be a mostly dry day for the Heartland, with only a few scattered showers forecast in North Dakota, west-central Illinois, and Southern Ohio through this evening. Expected accumulation will likely be light, with the system in North Dakota and Minnesota producing the highest chances for rain – up to three quarters of an inch over the next 24 hours.
NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are finally showing signs of more moderate temperatures and a growing return to near normal precipitation levels for most of the Heartland by late next week.
Financials
Markets got a heavy dose of long-awaited optimism yesterday as the U.S. Labor Department’s monthly Consumer Price Index (CPI) reading reported softer-than-expected price increases through July 2022, suggesting that inflationary pressures may be receding slightly.
Falling energy prices played a big factor in the July 2022 CPI report, which found that prices rose 8.5% higher than year ago values in July 2022. The June reading came in at a 41-year high of 9.1%. Economists had been expecting yesterday’s report to hit 8.7%, so the slightly smaller figure opened bullish floodgates across the markets.
The report sent U.S. equity indices soaring yesterday, sending the tech-heavy Nasdaq into a bull market. The S&P 500 closed at $4,210.24, still about 188 points away from entering into a bear market, but still a comfortable 545 points away from mid-June 2022’s year-and-a-half lows. The index traded 0.31% higher to $4,223.25 this morning on optimism for easing inflation.
“Inflation data is the really key determinant of market sentiment. Depending on how you cut the data, you can start to sell a more positive or negative story,” Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald, told the Wall Street Journal this morning.
What else I’m reading this morning on our website, FarmFutures.com:
Naomi Blohm explains why Friday’s WASDE report is so important – and how farmers can prepare for it.
Bryce Knorr tries to predict what will happen after Friday’s WASDE reports. It’s a double-edged sword: weaker demand could take the air out of the bull market, but it could also lower input costs.
Farm Futures’ yield results from our latest farmer survey!
Virginia Tech’s Dave Kohl predicts what is in store for farm finances over the next couple years.
A special Farm Futures white paper by University of Minnesota agricultural economist Ed Usset examines different grain marketing strategies farmers may look to use.
Morning Ag Commodity Prices – 8/11/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.2675
6.1875
6.265
0.0525
0.85%
DEC ’22 CORN
$ / BSH
6.235
6.1525
6.2325
0.0475
0.77%
MAR ’23 CORN
$ / BSH
6.3025
6.2225
6.3
0.0425
0.68%
MAY ’23 CORN
$ / BSH
6.335
6.265
6.3325
0.04
0.64%
JUL ’23 CORN
$ / BSH
6.335
6.26
6.335
0.0425
0.68%
SEP ’23 CORN
$ / BSH
6.0025
5.94
5.9925
0.0225
0.38%
DEC ’23 CORN
$ / BSH
5.915
5.85
5.915
0.04
0.68%
AR2 ’24 CORN
$ / BSH
5.9775
5.925
5.9775
0.025
0.42%
MAY ’24 CORN
$ / BSH
6.0175
#N/A
5.9875
0
0.00%
AUG ’22 SOYBEANS
$ / BSH
17.1775
16.9
17.1775
0.29
1.72%
SEP ’22 SOYBEANS
$ / BSH
15.21
14.8925
15.21
0.12
0.80%
NOV ’22 SOYBEANS
$ / BSH
14.42
14.1825
14.42
0.1425
1.00%
JAN ’23 SOYBEANS
$ / BSH
14.48
14.24
14.475
0.1375
0.96%
MAR ’23 SOYBEANS
$ / BSH
14.485
14.26
14.485
0.14
0.98%
MAY ’23 SOYBEANS
$ / BSH
14.49
14.27
14.49
0.1375
0.96%
JUL ’23 SOYBEANS
$ / BSH
14.4625
14.25
14.4625
0.1325
0.92%
AUG ’23 SOYBEANS
$ / BSH
14.07
14.0625
14.0625
-0.0275
-0.20%
SEP ’23 SOYBEANS
$ / BSH
0
#N/A
13.59
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.56
13.355
13.5575
0.14
1.04%
AN2 ’24 SOYBEANS
$ / BSH
13.53
13.53
13.53
0.085
0.63%
AUG ’22 SOYBEAN OIL
$ / LB
0
#N/A
70.56
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
67.9
66.55
67.78
0.4
0.59%
AUG ’22 SOY MEAL
$ / TON
525.8
523
525.7
10.1
1.96%
SEP ’22 SOY MEAL
$ / TON
459.2
449.8
458.8
9.2
2.05%
OCT ’22 SOY MEAL
$ / TON
419.5
411.7
419.1
6.7
1.62%
DEC ’22 SOY MEAL
$ / TON
414.5
406.5
414.2
6.4
1.57%
JAN ’23 SOY MEAL
$ / TON
410.2
403.1
410.2
6.1
1.51%
SEP ’22 Chicago SRW
$ / BSH
8.0925
7.945
8.08
0.0825
1.03%
DEC ’22 Chicago SRW
$ / BSH
8.2625
8.1075
8.25
0.0875
1.07%
MAR ’23 Chicago SRW
$ / BSH
8.4225
8.2775
8.4075
0.08
0.96%
MAY ’23 Chicago SRW
$ / BSH
8.5275
8.39
8.4925
0.06
0.71%
JUL ’23 Chicago SRW
$ / BSH
8.5025
8.3825
8.4825
0.055
0.65%
SEP ’23 Chicago SRW
$ / BSH
8.52
8.5
8.5175
0.06
0.71%
DEC ’23 Chicago SRW
$ / BSH
8.5775
8.47
8.54
0.0425
0.50%
SEP ’22 Kansas City HRW
$ / BSH
8.805
8.6525
8.805
0.0775
0.89%
DEC ’22 Kansas City HRW
$ / BSH
8.8525
8.705
8.8525
0.085
0.97%
MAR ’23 Kansas City HRW
$ / BSH
8.91
8.76
8.91
0.0875
0.99%
MAY ’23 Kansas City HRW
$ / BSH
8.915
8.8225
8.9075
0.06
0.68%
JUL ’23 Kansas City HRW
$ / BSH
8.8225
8.8075
8.815
0.065
0.74%
SEP ’23 Kansas City HRW
$ / BSH
8.15
#N/A
8.7225
0
0.00%
DEC ’23 Kansas City HRW
$ / BSH
8.785
8.7675
8.78
0.0475
0.54%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.13
9.01
9.13
0.0675
0.74%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.2625
9.14
9.2625
0.07
0.76%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.38
9.2625
9.38
0.0675
0.72%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.4475
#N/A
9.395
0
0.00%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.4525
#N/A
9.4075
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.25
9.155
9.25
0.025
0.27%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.2775
9.205
9.2775
-0.0175
-0.19%
SEP ’21 ICE Dollar Index
$
105.335
104.755
104.82
-0.26
-0.25%
SE ’21 Light Crude
$ / BBL
93.08
91.24
92.87
0.94
1.02%
OC ’21 Light Crude
$ / BBL
92.36
90.57
92.12
0.92
1.01%
SEP ’22 ULS Diesel
$ /U GAL
3.503
3.3893
3.4911
0.0808
2.37%
OCT ’22 ULS Diesel
$ /U GAL
3.4552
3.353
3.433
0.0573
1.70%
SEP ’22 Gasoline
$ /U GAL
3.1139
3.0487
3.0993
0.029
0.94%
OCT ’22 Gasoline
$ /U GAL
2.8241
2.77
2.8193
0.0248
0.89%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
180.675
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
185
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
139.2
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
144.475
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
122.25
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
100.85
0
0.00%
AUG ’22 Class III Milk
$ / CWT
20.11
20.11
20.11
0.08
0.40%
SEP ’22 Class III Milk
$ / CWT
20.42
20.4
20.42
0.21
1.04%
OCT ’22 Class III Milk
$ / CWT
20.88
#N/A
20.84
0
0.00%
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