Afternoon report: Corn, soybeans and wheat all trend lower on Monday
A round of badly needed rains should arrive later this week, which caused substantial cuts to soybean prices to start the week. Corn and wheat prices were also in the red today, largely due to an uptick in optimism that ships are finally moving out of Ukrainian ports again.
The eastern Corn Belt is set to get a substantial drink over the next several days, with large parts of Illinois, Indiana and Michigan likely to see another 1″ to 1.5″ or more rainfall between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally dry weather for the central U.S. between August 8 and August 14, with widespread hotter-than-normal conditions also likely during this time.
On Wall St., the Dow dipped 44 points lower in afternoon trading to 32,800 as investors prepare for another big week of corporate earnings reports and governmental economic data (nonfarm payrolls report, etc.). Energy futures trended significantly lower, with crude oil down nearly 5% to $93 per barrel on some lingering demand worries. Diesel dropped more than 3.25%, with gasoline down 3.75%. The U.S. Dollar softened moderately.
Last Friday, commodity funds were net buyers of corn (+2,500), soybeans (+8,500), soymeal (+1,500) and soyoil (+7,500) contracts but were net sellers of CBOT wheat (-5,500).
Corn
Corn prices faded more than 1.25% lower today on a round of technical selling due in part to rainy forecasts later this week, along with fresh export optimism coming out of Ukraine. September futures dropped 8.5 cents to $6.0775, with December futures down 9 cents to $6.11.
Corn basis bids were steady to weak across the central U.S. after falling 5 to 10 cents lower at five Midwestern locations on Monday.
Corn export inspections for the week ending July 28 showed moderate improvements, moving to 33.7 million bushels. That was near the middle of trade estimates that ranged between 21.7 million and 45.3 million bushels. China was the No. 1 destination, with 16.3 million bushels. Cumulative totals for the 2021/22 marketing year are well below last year’s pace, with 2.044 billion bushels.
Ahead of the next USDA crop progress report, out later this afternoon, analysts expect to see corn conditions decline another point, with 60% of the crop rated in good-to-excellent condition through July 31.
“Anyone predicting markets does so at their peril,” warns grain market analyst Bryce Knorr. “Indeed, ‘go figure’ might as well be the market’s motto right now.” That said, Knorr also notes that there are some signs that grain prices are trying to “prove an early summer bottom.” He explores the various factors at play in today’s Ag Marketing IQ blog – click here to learn more.
The European Commission lowered its monthly corn production forecast by 8% to 2.590 billion bushels, citing unusually hot, dry weather that has been prevalent throughout the summer. EU corn imports for 2022/23 are expected to be mostly level from year-ago totals, with around 650 million bushels.
Taiwan issued an international tender to purchase 2.6 million bushels of animal feed corn to be sourced from the United States, South America or South Africa. Offers must be submitted by August 3, and the grain is for shipment between October 1 and November 4, depending on origin.
Preliminary volume estimates were for 256,579 contracts, falling moderately short of Friday’s final count of 313,463.
Soybeans
Soybean prices succumbed to some first-of-month profit-taking and technical selling. Rainy forecasts generated plenty of additional downward pressure today. August futures tumbled 42.25 cents to $15.9475, with September futures losing 53.25 cents to $14.34.
Soybean basis bids were steady to weak after tumbling 9 to 45 cents lower across eight Midwestern locations on Monday.
Soybean export inspections firmed moderately higher week-over-week after reaching 20.4 million bushels. That was near the middle of analyst estimates, which ranged between 11.0 million and 29.4 million bushels. Mexico topped all destinations, with 5.2 million bushels. Cumulative sales during the 2021/22 marketing year are still moderately below last year’s pace, with 1.968 billion bushels.
Analysts are expecting to see another one-point reduction in soybean condition when USDA releases its next crop progress report his afternoon, offering an average trade guess of 60% rated in good-to-excellent condition through Sunday. Individual estimates ranged between 57% and 61%.
Brazilian soybean exports reached 276.3 million bushels in July, which was a year-over-year reduction of 13.3%. Brazilian corn exports more than doubled year-ago results, meantime, with a July tally of 162.4 million bushels.
Preliminary volume estimates were for 186,560 contracts, shifting slightly below Friday’s final count of 213,966.
Wheat
Wheat prices fell 1% to 1.25% lower on Monday on hopes that an influx of Ukrainian grain exports will soon happen. Ongoing harvest progress across the Northern Hemisphere continues to apply additional downward pressure. September Chicago SRW futures dropped 8.25 cents to $7.9950, September Kansas City HRW futures fell 9.25 cents to $8.6525, and September MGEX spring wheat futures lost 11.5 cents to $8.9450.
Wheat export inspections came in at 9.4 million bushels through July 28, trending moderately lower from the prior week and staying on the very low end of trade estimates, which ranged between 9.2 million and 20.2 million bushels. Mexico was the No. 1 destination, with 3.9 million bushels. Cumulative totals for the 2022/23 marketing year are trending moderately below last year’s pace so far, with 104.7 million bushels.
Prior to this afternoon’s crop progress report from USDA, analysts think the agency will show this season’s winter wheat harvest move from 77% complete a week ago up to 84% through July 31. And spring wheat quality ratings are expected to slide a point lower, with 67% of the crop in good-to-excellent condition through Sunday.
A deal brokered by the United Nations that allows for safe passage out of three Ukrainian ports has officially begun to reap rewards. Earlier today, a ship loaded with grain left Odesa for Lebanon under the safe passage agreement. This marks the first grain shipped out of Ukrainian ports since the Russian invasion began in late February. There are still an estimated 16 ships docked and loaded with more than half a million metric tons of cargo (mostly grain) waiting to sail from Ukrainian ports.
Russian consultancy Sovecon estimates that the country exported around 84.5 million bushels of wheat in July, more than doubling its efforts from June and posting the biggest results since February. Russia is the world’s No. 1 wheat exporter.
Preliminary volume estimates were for 71,783 CBOT contracts, which was around 20% below Friday’s final count of 89,195.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
cents/bu
22-Sep
621.5
594.25
607
-8.5
22-Dec
625
597.25
609.75
-9
Soybeans
22-Sep
1504
1421
1432
-53.25
22-Dec
1481
1395.5
1406
-59.5
Soymeal $/ton
22-Sep
446
425
429.7
-10.3
Soyoil cents/lb
22-Sep
66.8
63.5
64.09
-2.65
Wheat $/bushel
22-Sep
820.25
781.25
800.25
-8.25
22-Dec
838.25
800.25
819
-4.75
KC Wheat
22-Sep
886.5
845.25
866.5
-9.25
22-Dec
893
852.75
874
-9.25
MPLS Wheat
22-Sep
913.75
879.75
897.5
-11.5
22-Dec
923
893
910.25
-11.5
Live Cattle cents/lb
22-Aug
137
136.275
136.825
0.375
Feeder Cattle cents/lb
22-Sep
183.625
182.1
183.025
1.475
Lean Hogs cents/lb
22-Oct
97
95.025
97
-0.225
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
98.65
92.42
93.82
-4.8
Diesel
22-Aug
3.5584
3.4017
3.4278
-0.1212
Unleaded Gasoline $/gallon
22-Aug
3.1133
2.9101
2.9993
-0.1139
Natural Gas
22-Oct
8.276
7.735
8.247
0.039
U.S. Dollar Index
22-Sep
105.92
105.105
105.33
-0.449
Gold $/ounce
22-Sep
1777
1759.8
1765.2
2.3
Copper
22-Aug
3.5805
3.534
3.534
-0.05
Fertilizer Swaps
(as of 07/29)
DAP Tampa-index
916.5
0
DAP-New Orleans
837.8
-1.65
Urea-New Orleans
581.5
22.05
Urea-Middle East
707.5
37.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
439.8
-8.27
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