Afternoon report: Corn also down moderately on Monday, while soybeans firm slightly
Grain prices were mixed but mostly lower to start the week after a selloff on Wall St., sinking energy prices and a stronger U.S. Dollar generated ample downward pressure on Monday. Wheat prices were hit the hardest, with some contracts losing more than 3% today. Corn prices were also down around 1%. Soybeans bucked the overall trend, wobbling but closing today’s session with modest gains.
Much of the Mid-South and Plains could see at least some measurable moisture fall between Tuesday and Friday, with parts of the Mid-South set to gather as much as 3″ or more during that time, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts above-average precipitation for the upper Midwest and Northern Plains between December 12 and December 18, with near-normal temperatures for most of the Corn Belt next week.
On Wall St., the Dow tumbled 553 points lower in afternoon trading to 33,876 on worries that the Federal Reserve will continue its aggressive interest rate hikes, which could steer the country into a recession. That news also pushed energy futures significantly lower, with crude oil down more than 3.5% this afternoon to $77 per barrel. Gasoline was also down around 3.5%, while diesel plummeted 5% lower today. The U.S. Dollar firmed considerably.
On Friday, commodity funds were net buyers of soybeans (+1,500) and soymeal (+500) contracts but were net sellers of corn (-10,500), soyoil (-10,000) and CBOT wheat (-7,000).
Corn
Corn prices followed a broad set of commodities lower on a technical setback on Monday, losing nearly 1% by the close. December futures dropped 6.25 cents to $6.2875, with March futures down 5.75 cents to $6.4050.
Corn basis bids were steady to mixed to start the week, moving as much as 5 cents higher at an Illinois river terminal and as much as 5 cents lower at a Nebraska processor on Monday.
Corn export inspections climbed moderately higher week-over-week to 20.6 million bushels. That was near the middle of trade estimates, which ranged between 11.8 million and 29.5 million bushels. China was the No. 1 destination, with 11.0 million bushels. Cumulative totals for the 2022/23 marketing year remain moderately below last year’s pace, with 249.7 million bushels.
Mexico imports around 670 million bushels of genetically modified corn from the United States annually but has plans to ban imported GMO corn by 2024. Ken Dallmier, chief executive at Clarkson Grain, told Reuters reporters that there isn’t currently enough non-GMO corn supplies in the U.S. to meet Mexico’s needs but also says “there is still time for market forces to affect the supply and logistics to satisfy Mexico’s needs and desire, but that window is rapidly closing.” More than 90% of corn grown in the U.S. is genetically modified.
Is it a smart move to lock in fuel for next year to protect against volatile prices? “Costs for energy account for just 5% or less of projected crop expenses, according to the latest estimates from USDA. But timely purchases are never out of season, and locking in fuel for next year could offer protection against petroleum markets that, last week, fell by a third from highs set March after Russia invaded Ukraine,” notes grain market analyst Bryce Knorr, who dug deeper into some energy trends in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 227,177 contracts, which was substantially lower than Friday’s final count of 388,371.
Soybeans
Soybean prices faced downward pressure after many other commodities turned sour on Monday but managed to stay in the green after a flash sale to China was announced this morning, and as Chinese covid restrictions were softened over the weekend. January futures picked up 1.5 cents to $14.40, while March futures inched half a penny higher to $14.47.
Soybean basis bids were steady to weak after spilling 5 to 10 cents lower across three Midwestern locations on Monday.
Private exporters announced to USDA the sale of 4.8 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which began September 1.
Soybean export inspections were strong again last week, reaching 66.3 million bushels. Analysts were generally expecting to see inspections reach this level, with trade guesses ranging between 40.4 million and 88.2 million bushels. China accounted for more than half of last week’s total, with 45.1 million bushels. Cumulative totals for the 2022/23 marketing year are still moderately lower than year-ago totals so far, with 778.1 million bushels.
Brazil’s soybean planting progress for the 2022/23 season has reached 91%, according to the latest data from the country’s AgRural consultancy. Some drought problems were noted, especially in Rio Grande do Sul, but AgRural doesn’t seem to be overly concerned at this time.
Preliminary volume estimates were for 150,328 contracts, spilling slightly below Friday’s final count of 167,740.
Wheat
Wheat prices trended 2% to 3% lower following a round of technical selling largely spurred by spillover weakness from a broad set of other commodities, as well as a stronger U.S. Dollar. March Chicago SRW futures fell 21 cents to $7.40, March Kansas City HRW futures lost 27.25 cents to $8.4350, and March MGEX spring wheat futures dropped 20 cents to $9.0125.
Wheat export inspections were better than expected last week, with 12.3 million bushels. That was above the entire range of trade guesses, which came in between 6.4 million and 11.0 million bushels. The Philippines topped all destinations, with 4.0 million bushels. Cumulative totals for the 2022/23 marketing year are slightly below last year’s pace, with 400.9 million bushels.
Egypt’s supply minister reported today that the country’s strategic reserves are sufficient for another five months. Egypt also has nearly six months’ worth of vegetable oil reserves – it is among the world’s top importers of both commodities.
Pakistan has been buying massive quantities of wheat, including recent purchases of 34.9 million bushels. The grain can be sourced from optional origins but traders expect to see a big portion come from Russia. The grain is for shipment starting in mid-December. Pakistan has been an active wheat buyer in recent months as it continues to recover from massive floods in September that caused $30 billion in agriculture and infrastructure damages.
Flooding has also recently occurred in Australia, but the government still expects to see record-breaking wheat production this season. A report from the Australian Bureau of Agricultural and Resource Economics (ABARES) estimates wheat production will climb to 1.345 billion bushels.
Ukrainian wheat exports shifted more than 20% lower between October and November, moving from 72.8 million bushels down to 58.1 million bushels. “The decline is due to Russian delays in inspection of vessels in Istanbul,” according to a statement by grain traders union UGA. Total grain exports in the 2022/23 marketing year are down 29.9% from the prior year’s pace.
Russian wheat exports are expected to reach 158.0 million bushels in November, which would match October’s tally, if realized. Russia’s wheat exports tend to find seasonal peaks around October through December.
China sold another 1.5 million bushels of its state wheat reserves on an auction held on November 30. That was 100% of the total available for sale. China has offered a series of similarly sized auctions in recent months as it attempts to boost local supplies.
Preliminary volume estimates were for 75,373 CBOT contracts, trending slightly lower than Friday’s final count of 78,831.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
638.25
625.5
628.75
-6.25
23-Mar
649
637.75
640.5
-5.75
Soybeans
23-Jan
1451
1435.25
1437.75
1.5
23-Mar
1458
1443
1445
0.5
Soymeal $/ton
23-Jan
433.9
423
432.1
8.1
Soyoil cents/lb
23-Jan
66.31
62.5
62.57
-2.46
Wheat $/bushel
22-Dec
730.5
722.25
715.5
-21.75
23-Mar
768
734
739
-21
KC Wheat
22-Dec
891.25
856.5
854.75
-25.5
23-Mar
877.75
840.75
841.75
-27.25
MPLS Wheat
22-Dec
935
904
912.75
-35.75
23-Mar
924.5
900.75
902
-20
Live Cattle cents/lb
22-Dec
153.55
153
153.225
-0.125
Feeder Cattle cents/lb
23-Mar
186.75
184.9
186.075
0.8
Lean Hogs cents/lb
23-Feb
91.9
89.825
90.65
0.225
Crude Oil $/barrel
*Energy prices may not represent final settlements
23-Jan
82.72
76.77
77.27
-2.71
Diesel
23-Jan
3.2382
2.9823
3.0094
-0.1591
Unleaded Gasoline $/gallon
23-Jan
2.348
2.1962
2.2133
-0.0671
Natural Gas
23-Feb
5.949
5.468
5.532
-0.637
U.S. Dollar Index
22-Dec
105.36
104.065
105.315
0.815
Gold $/ounce
23-Jan
1815
1771.6
1765
-30.9
Copper
22-Dec
3.8715
3.77
3.771
-0.077
Fertilizer Swaps
(as of 12/02)
DAP Tampa-index
692.0
-8
DAP-New Orleans
630.0
0
Urea-New Orleans
512.5
0
Urea-Middle East
556.5
-31
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
535.0
0
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