Morning report: Corn, soybean and wheat prices slightly mixed ahead of Thursday’s session. (Comments are updated by 7:30 a.m. Central Time.)
Overnight trends:
Corn: Up 3 to 4 cents
Soybeans: Up 3 to 4 cents
Wheat: Mixed
Grain prices didn’t see a lot of movement heading into Thursday’s session, as traders appeared mostly intent to wait for USDA’s next round of export sales data later this morning. News that a rail worker strike may have reached a tentative deal is also being carefully monitored right now. A statement from the White House at 5 a.m. ET applauds the deal as “an important win for our economy and the American people” after a marathon 20-hour negotiation session.
Overseas stock markets were mixed today. China’s Shanghai Composite sank more than 1% lower while other Asian markets closed with gains of 0.25% to 0.5%. European markets were narrowly mixed in midday trading. On Wall St., the Dow eased 54 points lower ahead of the opening bell to 31,195 ahead of a flurry of new economic reports that will cover retail sales, import prices and jobless claims.
Energy futures were in the red overnight. Crude oil fell 0.6%, hovering just below $88 per barrel. Diesel dropped 2.25%, while gasoline spilled 1.5% lower. Volatile natural gas prices tumbled more than 5% lower. The U.S. Dollar firmed slightly, with safe haven gold down around 0.75%.
The latest 72-hour precipitation map from NOAA shows more wet weather moving west to east between today and Saturday, although parts of the eastern Corn Belt won’t receive additional measurable moisture during this time. Official 6-to-10-day forecasts show seasonally hot, dry weather likely for most of the central U.S. between September 20 and September 24.
On Wednesday, commodity funds were net buyers of CBOT wheat (+4,000) contracts but were net sellers of corn (-9,000), soybeans (-9,500) and soyoil (-5,000). Funds were roughly even when trading soymeal contracts yesterday.
Corn
Corn prices firmed slightly overnight as traders wait for an unusually large set of export sales data later this morning (more on that below). Prices were up around 0.25% but are likely to face downward pressure over the next several weeks as harvest ramps up. Strong exports could help erase possible downward movements, however.
Corn basis bids were steady to weak after falling 8 to 65 cents lower across five Midwestern locations on Wednesday.
The U.S. Energy Information Administration reported yesterday that ethanol production tilted to the lowest levels in almost five months, with a daily average of 963,000 barrels for the week ending September 9. It was also the fifth consecutive week that the daily average failed to reach the 1-million-barrel benchmark.
Ahead of USDA’s next export report, out later this morning and covering the week through September 8, analysts think the agency will show new crop corn sales ranging between 11.8 million and 35.4 million bushels. This marks the first full week of the 2022/23 marketing year.
UDSA will also release export sales data from multiple preceding weeks today after the agency botched its attempted move to a new reporting system in August. Data for the weeks ending August 18 and August 25 will be combined, and data for the weeks ending September 1 and September 8 will be listed individually. USDA will only show weekly highlights text for its September 1 and September 8 reports.
USDA’s monthly WASDE reports are sometimes greeted with skepticism, but the latest round of supply and demand data feels more reliable, according to Bill Biedermann, hedging strategist with AgMarket.Net. “USDA reports are once again becoming a usable tool for buyers and sellers to budget and manage the risk of finding equilibrium,” he says, noting that the agency is recognizing extremely tight supplies and the reality of “not great” crop conditions. Biedermann offers additional analysis in a recent Ag Marketing IQ blog – click here to learn more.
The preliminary report from the CBOT showed daily futures volume falling to 197,301, while open interest firmed by 5,314. Options volume dropped to 55,114 and moderately favors calls (35,734) over puts (19,380). Implied volatility for near-the-money December contracts stabilized at 26.7% and don’t expire for another 71 days.
Soybeans
Soybean prices tested modest gains of 0.25% ahead of Thursday’s session. As with corn, a quick harvest pace could create some downward price pressure. The specter of a record-breaking 2022/23 Brazilian crop also looms in the background.
Soybean basis bids were steady to weak on Wednesday, tumbling as much as 70 cents lower at an Indiana processor yesterday and trending 1 to 30 cents lower across four other Midwestern locations.
Prior to this morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 11.0 million and 36.7 million bushels for the week ending September 8. Analysts also expect to see up to 375,000 metric tons of soymeal sales and up to 35,000 MT of soyoil sales.
Also coming out this morning is the new monthly crushing report from the National Oilseed Processors Association. Analysts think NOPA will show an August soybean crush totaling 166.110 million bushels. If realized, that would be 2.4% below July’s total but 4.6% above August 2021 totals, and it would also be the second-largest August crush on record.
How do your farm’s crop conditions stack up against other operations in the U.S.? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
The preliminary report from CBOT showed daily futures volume dropping to 200,454, with open interest trending 8,451 higher. Options volume fell to 49,410 and more heavily favors puts (30,113) over calls (19,297). Implied volatility for near-the-money November contracts held steady at 24.1% and expire in another 35 days.
Wheat
Wheat prices made moderate inroads on Wednesday but were mixed heading into Thursday’s session as traders assess the rapidly updating story on a possible rail strike as well as Ukraine’s ongoing production and export challenges. Spring wheat prices tested modest gains overnight, while winter wheat prices were down around 0.5%.
Ahead of this morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 20.2 million bushels for the week ending September 8.
StatsCan released its latest round of crop data on Wednesday and expects Canadian wheat production to rebound 55.6% higher in 2022 to 1.275 billion bushels. (Canada battled widespread drought in 2021.) Canada’s oats (+65.7%) and barley (+35.5%) outputs are also expected to rise sharply year-over-year.
European consultancy Strategie Grains expects 2022/23 EU soft wheat production to trend moderately lower year-over-year to 4.560 billion bushels, with average yields of 84.8 bushels per acre across 53.622 million acres.
Saudi Arabia issued an international tender to purchase 19.7 million bushels of wheat from optional origins that closes on Friday. The grain is for arrival between mid-November and late February.
As expected, Japan has purchased 3.6 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Of the total, 32% was sourced from the U.S. The grain is for arrival by the end of the year.
The preliminary report from CBOT showed daily SRW volume at 71,714, with open interest trending 776 lower. Options volume firmed to 15,388 and continues to favor calls (15,388) over puts (5,740) by a more than 2:1 margin. Implied volatility for December near-the-money options fell to 37.8% and expires in 71 days.
Volume in HRW wheat improved to 27,544, with open interest trending 190 higher. Options volume fell to 780 and heavily favors calls (538) over puts (242).
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