Afternoon report: Wheat prices capture significant gains, while corn and soybeans make moderate in-roads
Grain prices started the week on a strong note, anchored by huge wheat gains amid fresh Black Sea woes (more on that below). Winter wheat contracts saw gains of more than 5%, with spring wheat contracts up around 2.75%. Corn and soybeans followed suit on the ensuing spillover strength, with both commodities up around 1.25% today.
Very little rain is expected for the Midwest and Plains between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA (which you can view here). Meantime, the agency’s 8-to-14-day outlook predicts a return to seasonally wet weather between the upper Midwest and Northern Plains between November 7 and November 13, with warmer-than-normal conditions probable for the eastern half of the country.
On Wall St., the Dow was down 66 points in afternoon trading to 32,795 but is still poised to make October the best monthly performance since 1976. Investors are highly interested in what happens at the next Federal Reserve meeting on Wednesday. Energy futures faded lower, with crude oil down 2% in afternoon trading to $86 per barrel. Gasoline dropped more than 3%, while nearby diesel contracts tumbled nearly 8% lower. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of soybeans (+2,000) and soymeal (+3,500) contracts but were net sellers of corn (-1,000), soyoil (-2,000) and CBOT wheat (-3,000).
Corn
Corn prices found technical support from surging wheat prices, with a decent round of grain export inspection data from USDA offering a bit of assistance as well. December futures added 8 cents to $6.8875, with March futures up 7.75 cents to $6.9450.
Corn basis bids were mostly steady across the central U.S. on Monday but did shift 5 cents lower at an Illinois processor today.
Corn export inspections made modest week-over-week improvements, reaching 18.5 million bushels. That was also toward the higher end of analyst estimates, which ranged between 8.9 million and 25.6 million bushels. Mexico was the top destination, with 9.5 million bushels. Cumulative totals for the 2022/23 marketing year are still running moderately behind last year’s pace, with 148.3 million bushels.
Prior to the next USDA crop progress report, out Monday afternoon, analysts expect the agency to show corn harvest move from 61% completion a week ago up to 75% as of October 30. Individual trade guesses ranged between 72% and 81%.
According to the latest data from the European Commission, EU corn imports during the 2022/23 marketing year are more than doubling last year’s pace so far, with 376.6 million bushels through October 30.
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Preliminary volume estimates were for 416,781 contracts, which more than doubled Friday’s final count of 178,838.
Soybeans
Soybean prices followed corn and wheat prices higher following a round of technical buying on Monday. A robust round of grain export inspection data offered plenty of additional support. November futures rose 18 cents to $14.0575, with January futures up 18.25 cents to $14.1850.
Soybean basis bids were steady to firm across the central U.S. on Monday after climbing as much as 52 cents higher at an Ohio elevator and improving 2 to 15 cents across four other Midwestern locations today.
Soybean export inspections jumped to 106.1 million bushels last week. That tally also exceeded the entire range of trade guesses, which came in between 44.1 million and 97.4 million bushels. China was by far the top destination, with 79.9 million bushels. Cumulative totals for the 2022/23 marketing year are still moderately below last year’s pace so far, with 279.3 million bushels.
Ahead of the next USDA crop progress report, out Monday afternoon, analysts expect the agency to show the 2022 soybean harvest move from 80% completion a week ago up to 89% as of October 30. Individual trade estimates ranged between 85% and 93%.
European Union soybean imports during the 2022/23 marketing year are trending moderately below last year’s pace so far after reaching 134.5 million bushels through October 30. EU soymeal imports have seen modest year-over-year declines, with 5.34 million metric tons over the same period.
Brazil just completed its latest presidential election, ousting incumbent Jair Bolsonaro in favor of newcomer Luiz Inacio by a narrow margin. Upset by Bolsonaro’s loss, protestors were partially blocking roads in Mato Grosso, which in turn angered farmers worried about possible delays for grain transportation.
Preliminary volume estimates were for 182,819 contracts, trending moderately below Friday’s final count of 272,720.
Wheat
Wheat prices made significant inroads on a robust round of technical buying after Russia backed out of a Black Sea safe passage agreement after it said some of its vessels in Crimea were attacked (an accusation that the U.N. says is unfounded because no other ships were in the area when the reported attacks occurred). December Chicago SRW futures climbed 49 cents to $8.7825, December Kansas City HRW futures rose 48 cents to $9.73, and December MGEX spring wheat futures gained 26.25 cents to $9.7125.
Wheat export inspections were lackluster after only reaching 4.6 million bushels last week. That was on the very low end of trade estimates, which ranged between 3.7 million and 18.4 million bushels. Mexico was the No. 1 destination, with 1.1 million bushels. Cumulative totals for the 2022/23 marketing year are barely below last year’s pace so far, with 348.8 million bushels.
Analysts expect to see USDA report that 88% of the 2022/23 winter wheat crop has been planted through October 30 when the agency releases its next crop progress report later this afternoon. USDA will also offer its first look at quality ratings today – analysts expect to see 41% of the crop in good-to-excellent condition.
European Union soft wheat exports for the 2022/23 marketing year are running slightly ahead of last year’s pace so far after reaching 424.0 million bushels through October 30. EU barley exports are trending significantly below last year’s pace, in contrast, with 109.3 million bushels during the same period.
Over the weekend, Russia suspended its role in a deal that was allowing safe passages of Ukrainian cargo ships hauling exports out of several Black Sea ports. Russia now says it won’t “guarantee the safety of civilian ships” moving forward. Despite that, 12 Ukrainian vessels left port today carrying 354,000 metric tons of grain – the biggest single-day tally since the Russian invasion began in late February. Ukraine is a significant global exporter of both wheat and corn.
Russian consultancy IKAR expects the country’s 2023 wheat production fall from a record-breaking effort of 3.711 million bushels this year down to 3.197 billion bushels. Russia’s exportable surplus for 2022/23 is at 1.837 billion bushels.
China recently sold nearly 1.5 million bushels of its state wheat reserves on an auction held on October 26, which was 100% of the total offered. The grain was comprised of crops produced between 2014 and 2017.
Egypt, one of the world’s top wheat importers, reported over the weekend that it has strategic wheat reserves that are sufficient for more than five months. Egypt’s vegetable oil reserves are also sufficient for more than five months, according to the country’s supply minister.
Preliminary volume estimates were for 181,422 CBOT contracts, roughly tripling Friday’s final count of 60,150.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
700
684.25
691.5
8
23-Mar
704.75
689.5
696.75
7.75
Soybeans
22-Nov
1411.25
1385.5
1407
18
23-Jan
1424
1397.75
1419.5
18.25
Soymeal $/ton
23-Jan
430
412.3
419.1
2.1
Soyoil cents/lb
23-Jan
71.44
69.55
70.61
1.41
Wheat $/bushel
22-Dec
893.25
853.75
882.25
49
23-Mar
911.25
872
899.25
46.5
KC Wheat
22-Dec
982.5
950
978.75
48
23-Mar
979
946.5
974.25
44.5
MPLS Wheat
22-Dec
990
957
981.25
26.25
23-Mar
996.25
966
989.75
27.25
Live Cattle cents/lb
22-Oct
150.675
146.775
146.775
-3.6
Feeder Cattle cents/lb
23-Jan
179.825
177.7
179.4
-0.975
Lean Hogs cents/lb
23-Feb
89.55
87.95
88.3
-0.55
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Dec
88.65
85.3
86.32
-1.58
Diesel
22-Nov
4.62
4.0861
4.493
-0.0568
Unleaded Gasoline $/gallon
22-Nov
2.91
2.72
2.8168
-0.0898
Natural Gas
23-Jan
6.617
6.086
6.591
0.638
U.S. Dollar Index
22-Dec
111.535
110.585
111.45
0.844
Gold $/ounce
22-Dec
1648.5
1636.2
1637.4
-2.2
Copper
22-Nov
3.43
3.4095
3.4155
-0.0505
Fertilizer Swaps
(as of 10/28)
DAP Tampa-index
700.0
0
DAP-New Orleans
790.9
-11.02
Urea-New Orleans
611.8
-38.58
Urea-Middle East
647.5
-55
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
614.5
-2.76
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