Afternoon report: Corn, soybeans and wheat all trend lower again on Tuesday
The worst of summer’s oppressive heat appears to be behind us. That reality, along with some lingering global demand concerns, led to another round of technical selling that pushed corn, soybean and wheat prices significantly lower again today. Corn and soybean prices each fell around 2.5%, while wheat losses ranged between 0.75% and 2%.
Rains will still be variable over the next several days, with parts of Minnesota, Iowa and Wisconsin likely to see the largest amounts, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry conditions will reemerge in the Northern Plains and upper Midwest between August 23 and August 29, with cooler-than-normal temperatures likely for much of the Corn Belt during that time.
On Wall St., the Dow firmed for a fifth-consecutive session, rising 329 points higher in afternoon trading to 34,242 on strong earnings reports from retail giants Walmart and Home Depot. Energy futures were mixed but mostly lower. Crude oil dropped another 3% this afternoon to $86 per barrel. Gasoline was down around 1.5%, while diesel firmed 1% higher. Volatile natural gas prices jumped 7% higher. The U.S. Dollar softened slightly.
On Monday, commodity funds were net sellers of all major grain contracts, including corn (-11,000), soybeans (-17,000), soymeal (-7,000), soyoil (-5,000) and CBOT wheat (-3,500).
Corn
Corn prices sputtered again as bearish sentiment remained stubbornly in place today after traders took another look at the latest weather forecasts, Ukrainian export trends and a handful of global demand red flags. September futures dropped 15.5 cents to $6.1125, with December futures down 18.25 cents to $6.10.
Corn basis bids spilled 14 to 30 cents lower at two interior river terminals and fell 3 to 5 cents lower at two other Midwestern locations while holding steady elsewhere across the central U.S. on Tuesday.
Corn ratings slid a point lower this past week, with 57% rated in good-to-excellent condition through Sunday. Analysts were expecting to see a two-point drop. Another 27% of the crop was rated fair (up a point from last week), with the remaining 16% rated poor or very poor (unchanged from a week ago). Physiologically, 94% of the crop is now silking, up from 90% a week ago, 62% has reached the dough stage, and 16% is now dented.
Does it pay to second-guess the USDA? August WASDE estimates are usually close to final results, but they’re not perfect, according to grain market analyst Bryce Knorr, who offers five additional ways to estimate yields in yesterday’s Ag Marketing IQ blog – click here to learn more.
A survey conducted by the Federal Reserve Bank of Chicago show that in Q3 2022, only 25% of respondents expect Midwestern farmland values to rise, and 71% expect current values to hold steady. Click here for more survey insights on commodity prices, cash rent trends and more.
According to the latest data from the European Commission, EU corn imports during the 2022/23 marketing season have reached 141.3 million bushels through August 14, which is more than doubling last year’s pace so far.
Preliminary volume estimates were for 205,505 contracts, which was slightly higher than Monday’s final count of 199,121.
Soybeans
Soybean prices suffered double-digit losses again on Tuesday after a round of technical selling trimmed prices another 2.5% lower. September futures tumbled 38.75 cents to $14.5525, with November futures down 30.5 cents to $13.8175.
Soybean basis bids were steady to mixed across the central U.S. on Tuesday – especially at several Midwestern processors, where bids moved between 20 cents higher and 30 cents lower today.
Private exporters announced to USDA the sale of 8.4 million bushels of soybeans for delivery to Mexico during the 2022/23 marketing year, which begins September 1.
Soybean quality ratings fell a point to 58% in good-to-excellent condition last week, mirroring analyst expectations. Another 30% is rated fair (unchanged from last week), with the remaining 12% rated poor or very poor (up a point from last week).
Physiologically, 93% of the crop is now blooming, up from 89% a week ago and matching the prior five-year average of 93%. Nearly three-fourths (74%) is now setting pods, up from 61% last week and a bit behind the prior five-year average of 77%.
European Union soybean imports for the 2022/23 marketing year have reached 57.7 million bushels through August 14, which is 11% lower that last year’s pace, so far. EU soymeal imports are also lower year-over-year, with 1.67 million metric tons over the same period.
Preliminary volume estimates were for 149,891 contracts, shifting slightly below Monday’s final count of 166,172.
Wheat
Wheat prices saw moderate cuts on a round of technical selling after Russia raised its production estimates and Ukraine sent another five ships out of Black sea ports earlier today. Spillover weakness from corn and soybeans generated additional headwinds. September Chicago SRW futures fell 15.5 cents to $7.8525, September Kansas City HRW futures dropped 11.5 cents to $8.7125, and September MGEX spring wheat futures faded 7 cents to $9.0375.
As of August 14, the total percent of this season’s spring wheat crop rated in good-to-excellent condition held steady, at 64%. Even so, the G/E split changed from 55/9 last week to 58/6 in Monday’s USDA crop progress report. Another 30% is rated fair (up two points from last week), with the remaining 6% rated poor or very poor (down two points from last week). Harvest progress reached 16%, up from 9% a week ago.
The 2021/22 winter wheat harvest inched closer to completion, with 90% finished through Sunday. That’s up from 86% a week ago but still behind 2021’s pace of 97% and the prior five-year average of 94%.
European Union soft wheat exports in the 2022/23 marketing year have reached 131.5 million bushels through August 14, which is moderately higher than last year’s pace, so far. EU barley exports are sharply lower year-over-year, in contrast, with 56.5 million bushels.
A Ukrainian agriculture union warns that the country’s winter grain plantings could fall between 30% to 60% from a year ago without state assistance, and if exports don’t soon pick up. “There are great hopes that the government … will find an opportunity to finance the sowing campaign,” according to UABC agriculture union director Roman Slastyon. “If this is not done now, then we will have serious problems.” The 2022/23 winter wheat planting season is expected to begin in a few weeks.
Meantime, Ukrainian deputy infrastructure minister Yuriy Vaskov said the country has received applications for 30 additional ships to arrive in Ukraine over the next two weeks to export grain. More than a dozen ships loaded with grain have already departed Ukraine this month (including five today). Yaskov says Ukraine’s total Black Sea export volume could reach 3 million metric tons in September and could eventually climb to 4 MMT per month.
Citing “great weather” and record yields in several regions, Russian consultancy Sovecon increased its estimates for the country’s 2022 wheat production by another 4.2% to reach 3.480 billion bushels. Russia is the world’s No. 1 wheat exporter.
Jordan purchased 2.2 million bushels of wheat from optional origins in an international tender that closed earlier today. The grain is for shipment in February.
Preliminary volume estimates were for 61,264 CBOT contracts, sliding slightly below Monday’s final count of 70,259.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
628.25
608
611
-15.5
22-Dec
629.5
607.75
610.25
-18.25
Soybeans
22-Sep
1494.5
1443.75
1454.25
-38.75
22-Nov
1413.75
1376
1381
-30.5
Soymeal $/ton
22-Oct
411.4
400.4
400.7
-9.2
Soyoil cents/lb
22-Oct
68.05
65.84
66.52
-1.15
Wheat $/bushel
22-Sep
810.5
782.5
786
-15.5
22-Dec
827.25
798.75
802.75
-15
KC Wheat
22-Sep
892.75
868.5
871.75
-11.5
22-Dec
894.75
870.25
873.25
-11.5
MPLS Wheat
22-Sep
918.25
898
902.75
-7
22-Dec
929.5
908
912.25
-8.25
Live Cattle cents/lb
22-Aug
141.725
139.825
141.275
1.525
Feeder Cattle cents/lb
22-Sep
186.325
183.425
185.8
2.8
Lean Hogs cents/lb
22-Dec
91.35
87.475
87.65
-3.2
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
90.65
85.73
86.06
-3.35
Diesel
22-Sep
3.5085
3.4194
3.4553
0.015
Unleaded Gasoline $/gallon
22-Sep
2.9669
2.8797
2.8856
-0.0661
Natural Gas
22-Oct
9.374
8.773
9.361
0.649
U.S. Dollar Index
22-Sep
106.84
106.205
106.42
-0.013
Gold $/ounce
22-Sep
1783
1770.5
1774.9
-6.5
Copper
22-Aug
3.6455
3.6045
3.6265
-0.0025
Fertilizer Swaps
(as of 08/12)
DAP Tampa-index
887.5
-25
DAP-New Orleans
829.5
-8.27
Urea-New Orleans
620.6
-40.79
Urea-Middle East
762.5
-2.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
440.9
1.1
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