Morning report: Losses curbed by winter wheat condition downgrades. (Comments are updated by 7:30 a.m. Central Time.)
Feedback from the Field is updated! A coworker in Northeastern Iowa shared with me last week that her soybeans planted two Saturdays ago were already emerging by the middle of last week thanks to steamy weather. With that in mind, FFTF questions are now updated to share emergence rate reports!
Want to see how your farm’s progress tacks up against other growers across the country?!
Just click this link to take the survey and share updates about your farm’s spring progress. 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
Corn prices eased $0.02-$0.03/bushel overnight as planting progress rates came in right at market expectations last night. Delays continue, but more favorable progress is expected over the next 10 days. Losses were held in check by smaller global corn production estimates for the 2022 season.
Corn planting progress was largely in line with analyst estimates last week. And I’d like to point out that despite the best week of planting progress to date this season, those guesses were not as optimistic as this crop needed to have a fighting chance at notching trendline yields (though hopefully I’m wrong about the yield outlook).
Through the week ending May 15, only 49% of anticipated 2022 U.S. corn acreage had been planted. The 27% weekly increase from the prior week (Week 18) was the largest weekly planting volume since 2015’s Week 18 when 36% of the crop was planted in a one-week span.
The five-year average for this point in the growing season stands at 67% complete. As I’ve noted in previous reports, 68% corn planting completion rates by May 15 is the desired target to ensure trendline yields for the growing season, according to research by two leading economists at USDA.
To be sure, many more factors can influence yield outcomes throughout the growing season – both negatively and positively. And yesterday’s reading helped planting rates pull away from comparisons of traumatic planting years – namely 2019.
Growers from the Upper Midwest to the Eastern Corn Belt will continue to dodge showers this week. These states account for the majority of corn acreage grown in the U.S. and are among the farthest behind in planting progress due to a cold and wet spring.
Planting progress in the Eastern Corn Belt will need to be significant in the coming week to ensure adequate yield potential. Farmers in the Upper Midwest may finally see opportunity for breathing room in the extended weather forecast and could see rapid planting progress over the next week as NOAA’s 6- to 10-day forecasts updated yesterday are shifting cooler for the Upper Midwest and wetter for the Eastern Corn Belt.
It will be a narrow window for growers in the Upper Midwest, however. The 8- to 14-day forecast shows an above average chance of precipitation along the U.S. – Canadian border so growers will need to capitalize on clear weather this week, after today’s showers dissipate.
Emergence rates continue to echo the slow planting progress, with only 14% of the crop emerged as of May 15, down from the five-year average of 32%.
Soybeans
Soybean prices edged a penny higher in the overnight trading session. Planting progress remains behind historical paces but is not yet past the prime planting timeline for optimal yields. Gains were held in check by slower than expected processing speeds in April 2022 across the U.S.
Soybean plantings look less dire than corn, though progress is still behind the five-year average. Through last Sunday, 30% of the crop had been planted, up 18% from the previous week and just 9% lower than the five-year average.
Favorable planting progress in the Mississippi River Delta and Southeastern U.S. states has helped to offset delays from the Midwest. Farmers will continue to race the rain for further planting progress this week.
Despite planting delays, emergence rates are wasting little time dawdling behind historical benchmarks. Soybean emergence rates rose 6% from the last week to 9% as of May 15. The five-year average for the same time is 12%.
April 2022 soy crush rates came in at the bottom end of analyst estimates in yesterday’s monthly crush report from the National Oilseed Processors Association (NOPA). It was a bit of a bearish surprise for soybean usage rates, and thus soybean futures prices. The trade had been targeting an average monthly crush rate of 172.4 million bushels for April 2022.
But even with strong crush margins and plentiful supplies, seasonal maintenance at several plants slowed production rates. To be sure, it was the second largest crush volume for the month of April, following only 2019/20’s April showing of 171.8 million bushels.
Wheat
Wheat prices only gave up some of yesterday’s limit-up gains after India introduced relaxed export ban requirements overnight. A bit of profit-taking was likely at play. At any rate, Chicago futures rested comfortably above the $12/bushel benchmark while Kansas City and Minneapolis futures traded in the mid-$13/bushel range. Losses were capped by slow spring wheat planting speeds in North Dakota and Minnesota and deteriorating winter wheat conditions in the U.S. Plains.
India relaxed its export ban slightly overnight, as the country will now allow shipments that were already loaded when the ban was announced to clear customs. India will also allow wheat exports to continue to Egypt, the world’s top wheat buyer. The government will only permit wheat exports that are backed by payment guarantees or letters of credit issued before May 13, so buyers who have already negotiated for Indian wheat will not be left hanging.
To be sure, these easing measures are not going to significantly add to the volume of wheat available on the world market. But it did help futures prices to calm down after hitting record highs during yesterday’s trading session.
Any optimism that had crept into the winter wheat complex with last week’s condition ratings improvement quickly vanished in yesterday’s Crop Progress report. Winter wheat conditions continued to suffer through persistent and blistering weather in the Plains last week, dropping 2% off its good to excellent rating and adding 3% to its very poor rating.
Through the week ending May 15, the winter wheat crop was rated at 27% good to excellent condition. At this point, the crop is closely mirroring the 1996 growing season. Heading rates stand at 48%, about 5% behind the five-year average thanks to hot and dry weather on the Plains. Rains are expected in the Central Plains today, which could help stabilize condition ratings.
But as evidenced in last week’s small grains forecast from USDA, yield damage is inevitable at this point in the growing cycle. USDA-NASS reported the highest rate of winter wheat abandonment in the U.S. since 2002. The 2022 winter wheat crop is expected to be 8% smaller than last year’s harvest.
And despite projected optimism for the spring wheat crop in USDA’s wheat production estimates last week, we could see another year of subpar spring wheat production too. Spring wheat planting through May 15 stood at 39%. The five-year average for the same period is 67%.
Top producers North Dakota and Minnesota are causing the most significant delays as cooler soil temperatures and persistent showers (not to mention a couple of late-season snowfall events) continue to keep farmers out of the fields.
This could not only reduce yield potential for the spring wheat crop, but it could also send some spring wheat acres into prevent plant (and possibly soybean) acreage this year. At any rate, I expect USDA’s next forecast for spring wheat production to be significantly smaller than current estimates imply.
Only 16% of the crop has emerged. Historically, about 30% of the crop has sprouted based on the five-year average benchmark.
Weather
Farmers are going to continue dodging scattered showers through this week according to NOAA’s short-range forecasts. A cross country precipitation system is currently developing in the Central Rockies and will likely create a series of shower systems that will bring some drought relief to the Western Plains today and tomorrow.
By Wednesday, the showers will move into the Mississippi River Valley and shift into the Eastern Corn Belt by Wednesday evening. NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are shifting cooler for the Upper Midwest and wetter for the Eastern Corn Belt.
Financials
S&P 500 futures fell 0.39% overnight to $4,008.01 on broader market sentiments about a potential recession in the coming year. To be clear, the stock market seems to be over-pricing this fear into its valuations as government bonds and high-yield debt securities have not mirrored an upward swing in purchasing or price.
More economic data expected throughout the week could help ease market jitters. In the meantime, investors are beginning to hoard cash reserves at the highest level in twenty years. A resolution is pending to the baby formula crisis after parents around the country have suffered through months of shortages.
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr points out that it will take significant crop damage to keep feeding corn bulls, so impending weather forecasts may create more market volatility.
Darren Frye offers valuable tips on prioritizing time and finances during spring planting season.
Roger Wright concludes a four-part series on buying put options, pointing out that buyers will never have to add money to margin positions by using this strategy.
In the latest South American Crop Watch column, Julio Bravo explains how fuel and fertilizer in Brazil are being impacted by the Russian-Ukrainian war.
Still digesting last week’s WASDE reports?
Me too! Our team did a lot of insightful work on last week’s WASDE reports – and there was a lot of information to digest! China, fertilizer, tight global corn and wheat stocks, and pending 2022 U.S. production implications were top of mind for me. Here are our team’s best insights on these issues!
For the top highlights, check out Ben Potter’s and my podcast recapping the report. For my analysis on 2022 U.S. production estimates, check out this article. Fertilizer prices may also impact 2022/23 global corn and wheat production. Here is what to expect. Watch FarmFutures.com in the coming days for my latest E-corn-omics column about Chinese demand, 2022/23 acreage contraction (yes, you read that right), and tightening global corn and wheat supplies.
Morning Ag Commodity Prices – 5/17/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
8.08
7.9725
8.035
-0.06
-0.74%
SEP ’22 CORN
$ / BSH
7.77
7.6675
7.715
-0.065
-0.84%
DEC ’22 CORN
$ / BSH
7.6575
7.555
7.6
-0.055
-0.72%
MAR ’23 CORN
$ / BSH
7.68
7.5825
7.6225
-0.0575
-0.75%
MAY ’23 CORN
$ / BSH
7.6575
7.57
7.61
-0.05
-0.65%
JUL ’23 CORN
$ / BSH
7.5775
7.5
7.545
-0.0375
-0.49%
SEP ’23 CORN
$ / BSH
6.8575
6.8375
6.8375
-0.015
-0.22%
JUL ’22 SOYBEANS
$ / BSH
16.605
16.4525
16.5325
-0.0325
-0.20%
AUG ’22 SOYBEANS
$ / BSH
16.105
15.9725
16.035
-0.0375
-0.23%
SEP ’22 SOYBEANS
$ / BSH
15.5
15.37
15.425
-0.04
-0.26%
NOV ’22 SOYBEANS
$ / BSH
15.1475
15.005
15.09
-0.03
-0.20%
JAN ’23 SOYBEANS
$ / BSH
15.14
15.035
15.075
-0.0575
-0.38%
MAR ’23 SOYBEANS
$ / BSH
14.9775
14.88
14.915
-0.05
-0.33%
MAY ’23 SOYBEANS
$ / BSH
14.935
14.83
14.8675
-0.055
-0.37%
JUL ’23 SOYBEANS
$ / BSH
14.8725
14.8075
14.8625
-0.0225
-0.15%
AUG ’23 SOYBEANS
$ / BSH
10.75
#N/A
14.6975
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
83.34
81.9
82.84
-0.15
-0.18%
AUG ’22 SOYBEAN OIL
$ / LB
79.75
78.5
79.18
-0.24
-0.30%
JUL ’22 SOY MEAL
$ / TON
415.5
410.5
412.7
-0.9
-0.22%
AUG ’22 SOY MEAL
$ / TON
410.2
406.4
408
-1.1
-0.27%
SEP ’22 SOY MEAL
$ / TON
405.6
402.4
403.7
-1.6
-0.39%
OCT ’22 SOY MEAL
$ / TON
401.1
398.4
399.7
-1.4
-0.35%
DEC ’22 SOY MEAL
$ / TON
402.6
399.7
400.6
-1.8
-0.45%
JUL ’22 Chicago SRW
$ / BSH
12.75
12.0075
12.275
-0.2
-1.60%
SEP ’22 Chicago SRW
$ / BSH
12.75
12.0375
12.2975
-0.2125
-1.70%
DEC ’22 Chicago SRW
$ / BSH
12.7
12.055
12.31
-0.2325
-1.85%
MAR ’23 Chicago SRW
$ / BSH
12.57
12.0025
12.235
-0.22
-1.77%
MAY ’23 Chicago SRW
$ / BSH
12.19
11.6775
11.825
-0.2775
-2.29%
JUL ’22 Kansas City HRW
$ / BSH
13.7925
12.985
13.2
-0.32
-2.37%
SEP ’22 Kansas City HRW
$ / BSH
13.785
12.995
13.225
-0.3125
-2.31%
DEC ’22 Kansas City HRW
$ / BSH
13.765
13
13.23
-0.3175
-2.34%
MAR ’23 Kansas City HRW
$ / BSH
13.615
12.93
13.11
-0.3025
-2.26%
MAY ’23 Kansas City HRW
$ / BSH
13.1025
12.6
12.6
-0.405
-3.11%
JUL ’22 MLPS Spring Wheat
$ / BSH
14.1275
13.4
13.645
-0.205
-1.48%
SEP ’22 MLPS Spring Wheat
$ / BSH
14.065
13.32
13.5875
-0.2
-1.45%
DEC ’22 MLPS Spring Wheat
$ / BSH
14
13.32
13.5275
-0.2025
-1.47%
MAR ’23 MLPS Spring Wheat
$ / BSH
13.9025
13.445
13.445
-0.2075
-1.52%
MAY ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
13.4075
0
0.00%
JUN ’21 ICE Dollar Index
$
104.26
103.295
103.3
-0.9
-0.86%
JU ’21 Light Crude
$ / BBL
115.53
113.49
115.36
1.16
1.02%
JU ’21 Light Crude
$ / BBL
113.16
111.21
113
1.18
1.06%
JUN ’22 ULS Diesel
$ /U GAL
3.9739
3.8605
3.9376
0.0301
0.77%
JUL ’22 ULS Diesel
$ /U GAL
3.8324
3.7313
3.8011
0.0273
0.72%
JUN ’22 Gasoline
$ /U GAL
4.0505
3.9695
4.0447
0.0218
0.54%
JUL ’22 Gasoline
$ /U GAL
3.8703
3.7988
3.8659
0.0254
0.66%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
157.4
0
0.00%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
167.425
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
133.175
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
133.9
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
103.825
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
104.8
0
0.00%
MAY ’22 Class III Milk
$ / CWT
24.99
24.99
24.99
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.74
24.52
24.62
0.21
0.86%
JUL ’22 Class III Milk
$ / CWT
24.47
24.25
24.45
0.2
0.82%
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