Afternoon report: Corn and soybean prices suffer seasonal setback, wheat mixed but mostly lower.
With warmer, drier weather anticipated over large parts of the Midwest this week, a sluggish start to the planting season is finally expected to take a big leap forward. That was enough to trigger a round of technical selling for corn and soybeans, with corn losing around 1.5% while soybeans eroded more than 2% lower. Wheat prices were mixed but mostly lower. Winter wheat contracts shifted moderately lower, while spring wheat managed to move slightly higher.
A look at NOAA’s latest 72-hour cumulative precipitation map shows plenty more moisture in store for parts of the Plains and upper Midwest between Tuesday and Friday. Conditions are likely to be much drier farther south, for the most part. NOAA’s 8-to-14-day outlook predicts seasonally dry weather returning to the Great Plains and western Corn Belt between May 16 and May 22, with cooler-than-normal conditions likely for much of the Corn Belt next week.
On Wall St., the Dow fell another 397 points to 32,502 as the latest selloff continues. Investors remain skittish over the bearish combination of high inflation and rising interest rates. Energy futures also declined. Crude oil was hammered, falling more than 6% this afternoon to $102 per barrel. Diesel dropped 3%, with gasoline down around 3.5%. The U.S. Dollar firmed fractionally.
Last Friday, commodity funds were net buyers of CBOT wheat (+1,000) contracts but were net sellers of corn (-12,500), soybeans (-12,000), soymeal (-2,000) and soyoil (-3,500).
Corn
Corn prices dropped 1.5% amid a round of technical selling largely spurred by improved weather forecasts that should allow planting to speed up significantly this week. May futures dropped 7.75 cents to $7.8450, with July futures down 12.25 cents to $7.7250.
Corn basis bids were largely unchanged across the central U.S. today but did trend 4 cents higher at an Ohio elevator.
Corn export inspections made it to 54.8 million bushels last week. That was on the upper end of trade guesses, which ranged between 39.4 million and 66.9 million bushels despite facing a week-over-week decline of 18%. Japan was the No. 1 destination, with 12.6 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 1.495 billion bushels.
Ahead of USDA’s next progress report, out later this afternoon and covering the week through May 9, analysts expect the agency to show corn plantings at 25% complete, versus 14% a week earlier. Individual trade guesses ranged between 18% and 33%.
Brazilian consultancy Agrural made a sharp reduction in its estimates for the country’s 2021/22 total corn production, falling from a prior projection of 4.618 billion bushels down to 4.421 billion bushels. That’s primarily due to downward revisions to Brazil’s safrinha (second corn) crop.
Ukraine’s spring plantings are trending 25% to 30% lower than they were a year ago, according to the country’s agriculture minister. The country also managed to export 1.090 million metric tons of grain last month, thanks to help from neighboring countries Romania and Bulgaria. However, challenges lie ahead in two months when those two countries start to export their own wheat crops.
South Korea purchased 2.6 million bushels of animal feed corn, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival around August 10.
Forget the Ides of March – grain market analyst Bryce Knorr wants you to consider the Ides of May. “Planting progress by May 15 is a key variable in the model USDA uses for predicting ‘normal’ yields, as I wrote earlier this month,” he notes. Planting pace alone won’t make or break a crop. But it can affect the impact of summer weather for better, or worse.” Find out why Knorr argues that there’s a chance (“though very small”) that corn prices could climb to $11 per bushel in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 276,902 contracts, tracking slightly lower than Friday’s final count of 293,271.
Soybeans
Soybean prices followed a broad set of commodities lower today, finding additional downward pressure from the possibility of an acreage uptick this season as well as a lackluster set of export inspection data from USDA this morning. May futures lost 33.5 cents to $16.22, with July futures down 35 cents to $15.87.
Soybean basis bids held steady at most Midwestern locations on Monday but did firm 3 cents at an Indiana processor and jump 32 cents higher at an Illinois river terminal today.
Soybean export inspections slid moderately lower week-over-week with 18.5 million bushels. That was also toward the lower end of analyst estimates, which ranged between 14.7 million and 32.5 million bushels. China was the No. 1 destination, with 7.7 million bushels. Cumulative totals for the 2021/22 marketing year remain well below last year’s pace, with 1.753 billion bushels.
Prior to this afternoon’s crop progress report from USDA, analysts expect the agency to show soybean plantings at 16% through May 8, versus 8% a week ago. Individual trade guesses ranged between 14% and 20%.
Customs data shows that China’s soybean imports through the first four months of 2022 inched 0.8% lower year-over-year, with 1.042 billion bushels. China is by far the world’s No. 1 soybean importer.
Preliminary volume estimates were for 155,850 contracts, moving moderately above Friday’s final count of 115,250.
Wheat
Wheat prices were mixed but mostly lower after an uneven round of technical maneuvering today. Winter wheat prices followed other grains lower, while spring wheat prices held onto small gains. July Chicago SRW futures fell 18.25 cents to $10.9025, July Kansas City HRW futures dropped 7.5 cents to $11.63, and July MGEX spring wheat futures picked up 2.5 cents to $12.1125.
Ahead of USDA’s next crop progress report, analysts expect to see a one-point improvement in winter wheat crop quality, moving from 27% rated in good-to-excellent condition a week ago to 28% through May 8. For spring wheat, planting progress is expected to move from 19% last week to 28%.
Wheat export inspections were fairly lackluster, eroding 40% lower from the prior week to 8.7 million bushels. That was also toward the lower end of trade estimates, which ranged between 3.7 million and 15.6 million bushels. Indonesia was the No. 1 destination, with 2.0 million bushels. Cumulative totals for the 2021/22 marketing year continue to lose ground verses year-ago totals, with 698.1 million bushels.
Egypt’s planning minister announced that the country plans to raise enough wheat locally to supply 65% of its total needs by 2025, compared with 45% in 2020. Egypt is among the world’s top wheat importers.
Algeria issued an international tender to purchase 1.8 million bushels of soft milling wheat from optional origins that closes on Wednesday. The purchase is comprised of two assignments, both of which are for shipment in July.
Preliminary volume estimates were for 70,160 CBOT contracts, shifting slightly below Friday’s final count of 78,486.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
792.25
782
784.5
-7.75
22-Jul
785
769
772
-12.25
Soybeans
22-May
1652.5
1615.25
1621
-33.5
22-Jul
1626
1578
1585.25
-35
Soymeal $/ton
22-Jul
415.1
402.1
402.8
-9.9
Soyoil cents/lb
22-Jul
81.2
79.1
79.74
-1.15
Wheat $/bushel
22-May
1086
1081.5
1083.25
-13.75
22-Jul
1135
1090
1092.75
-18.25
KC Wheat
22-May
1177.25
1153.25
22-Jul
1200
1161.25
1164.25
-7.5
MPLS Wheat
22-May
1199.75
22-Jul
1234.75
1202.5
1206.75
2.5
Live Cattle cents/lb
22-Apr
133.875
131.025
133.375
0.625
Feeder Cattle cents/lb
22-May
175.3
171.85
173.975
-0.725
Lean Hogs cents/lb
22-Jun
103.35
100.55
101.25
-2.85
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
110.49
102.45
102.78
-6.99
Diesel
22-May
4.0043
3.8102
3.829
-0.1253
Unleaded Gasoline $/gallon
22-May
3.8312
3.627
3.6386
-0.1204
Natural Gas
22-Jul
8.37
7.05
7.076
-1.052
U.S. Dollar Index
22-Jun
104.21
103.42
103.735
0.041
Gold $/ounce
22-Jun
1885.6
1853.9
1863.5
-17.7
Copper
22-May
4.23
4.1265
4.1855
-0.076
Fertilizer Swaps
(as of 05/06)
DAP Tampa-index
1,175.0
0
DAP-New Orleans
956.3
-33.07
Urea-New Orleans
713.8
-24.8
Urea-Middle East
795.0
-15
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
0
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