Morning report: Corn, wheat struggle against high dollar and sluggish U.S. export paces. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-3 cents
Soybeans up 1-2 cents; Soymeal up $1.50/ton; Soyoil down $0.54/lb
Chicago wheat down 4-5 cents; Kansas City wheat down 6-7 cents; Minneapolis wheat down 7-8 cents
*Prices as of 6:50am CDT.
Feedback from the Field updates! How is harvest progressing on your farm this fall?! Click this link to take the survey and share updates about your farm’s harvest 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!
My latest FFTF column is live on our site! Growers are progressing with soybean harvest much more quickly than their corn counterparts and many respondents are already feeling the pressure of dry soil on winter wheat sowing and crop development. Check out the article for all the latest farmer insights!
Corn
Corn prices drifted $0.01-$0.03/bushel lower overnight on a stronger dollar, strong shipping paces out of the Black Sea, and rapid harvest paces in the U.S.
USDA’s weekly Crop Progress report released yesterday afternoon saw corn harvest break past the halfway mark through the week ending October 23. As of last Sunday, 61% of the anticipated 2022 U.S. corn crop had been harvested, up 16% from the previous week and marking the fastest weekly harvesting pace recorded so far this season as soybean harvest winded down and farmers turned their combine’s attention to corn.
Any potential harvest delays markets had been worried about prior to this point due to a slow start are no longer a concern. Yesterday’s harvest completion rate of 61% towered over the five-year average for the same reporting period of 52%. While widespread showers across the Corn Belt in coming days are expected to slow progress this week, mostly clear skies are forecast into next week, which should help coax the fast combine speeds along.
The market continues to miss the mark for USDA’s target on harvest paces, however. Prior to the report’s release, trade estimates had pegged the week’s harvest progress at 62% complete. USDA’s data came in 1% behind the trade estimates, which at the very least, helped limit corn’s losses during the overnight trading session.
Corn processors to the west of the Mississippi River widened their cash offerings today as favorable profit margins are driving faster production speeds. Processors have been a bright spot for farmers this harvest season as they are one of the few buyers across the Heartland offering a premium for freshly harvested corn supplies.
In the Eastern Corn Belt, cash bids are trading at a steep discount to nearby futures prices at processors, elevators, and ethanol plants. But further west on the Plains, corn basis is quoted at a premium to December 2022 futures.
Basis eroded by $0.10/bushel on the Illinois River yesterday as low river levels on the Mississippi River continue to slow barge traffic on the nation’s largest waterway. As of yesterday, cash prices on the Ohio, Illinois, and Mississippi Rivers are trading anywhere between $0.28-$0.55/bushel below nearby December 2022 corn futures prices.
Yesterday’s lackluster corn futures price movement led farmers around the Heartland to opt against booking new cash sales yesterday, as many wait for better pricing opportunities. An Ohio originator told Reuters that some farmers were booking new sales, but only if the volume of grain hauled to end users was more than the contracted amount.
Soybeans
Soybean prices traded flat to $0.01-$0.02/bushel higher overnight. The market bucked fast harvest speeds in the U.S. as better than expected exporting paces reported by USDA yesterday and rising Chinese soybean import demand helped prop up overnight gains for the soybean complex.
USDA reported soybean harvest at 80% complete as of October 23 in yesterday’s Crop Progress report, up 17% from the previous week and 13% ahead of the five-year average benchmark. Soybean harvest is quickly winding down across the country.
Once again, USDA’s reading surpassed the market’s expectations. Markets had been expecting USDA’s soybean harvest completion rate to be reported at 77% yesterday, so USDA’s reading of 80% was ahead of the curve. Soybean markets traded largely flat overnight, however, so the market miss did not appear to be impacting prices too significantly this morning.
Cash soybean markets echoed many of the same sentiments as its corn counterpart yesterday, with some slight increases to basis at processing plants in Lafayette, Indiana and Council Bluffs, Iowa. Cash bids from processors continue to be offered at a premium to futures prices in the West and at a discount in the East.
Meanwhile, bids along the Ohio, Illinois, and Mississippi Rivers range between $0.20-$0.75/bushel below the November 2022 futures contract. Farmer sales remained slow as growers wait for higher futures offerings, though some sales were reported as farmers brought excess volumes to market.
Wheat
Wheat prices struggled against a stronger dollar this morning, falling $0.04-$0.08/bushel. Argentina is expected to receive beneficial showers in the coming days, which should help revive its wheat crop that has suffered drought damage this growing season. Rainfall has also helped revive dry soils in the U.S. Plains over the last couple days, improving the prospect for growing conditions for the newly planted winter wheat crop.
Slow export paces in the U.S. and rising export prospects out of Ukraine also weighed on the wheat complex overnight.
The Ukrainian Agriculture Ministry has flooded the markets with varying information over the past 24 hours. Yesterday, Deputy Agriculture Minister Markiyan Dmytrasevych estimated next year’s winter wheat harvested acreage in Ukraine would likely fall 30%-40% lower from this year’s crop.
Another deputy agriculture minister, Taras Vysotskiy, told Reuters overnight that Ukraine would likely be keeping its winter wheat acreage estimate for 2023 unchanged at 9.4 million acres even though unfavorable weather has delayed sowing progress.
Ukraine only harvested 76.7% of its winter wheat crop this year as a large portion of Ukraine’s key wheat growing regions in the East have been occupied by invading Russian military forces. The country had planted 14.8 million acres of winter wheat last year.
Winter wheat sowing through the week of October 23 was reported by USDA in its weekly Crop Progress report yesterday at 79% complete, up just 10% from the prior week and just a scant 1% ahead of the five-year average for the same reporting period.
Markets had been expecting USDA’s reading to come in at 81%, though the slower than expected speeds could not offset market losses this morning. Planting delays due to dry soils in top producer Kansas were likely the chief driver of the market’s overestimation of wheat planting progress over the past week.
Emergence rates continue to struggle amid dry conditions across the entire U.S. Heartland. As of October 23, only 49% of the newly sown winter wheat crop had emerged, up 9% from the previous week but still 7% behind the five-year average.
Basis was largely unchanged for soft red winter wheat offerings in the East as well as hard red winter wheat in the Southern Plains yesterday. Weak futures prices in yesterday’s trading session slowed new farmer cash sales.
Inputs
We are seeing concrete evidence of the European energy crisis’s impacts on the U.S. fertilizer market. A Reuters report published overnight found that U.S. exports of nitrogen fertilizers to the European Union has reached a high as the E.U. scrambles to source available fertilizer supplies after many of its plants curbed production late this summer in response to astronomical natural gas prices.
Russia was the E.U.’s primary supplier of natural gas ahead of the Black Sea conflict. But sanctions and a retaliatory stop to those purchases (plus Russia’s stoppage of natural gas flows to the E.U.) has sent natural gas prices soaring in the E.U. in recent months.
As a result, The Fertilizer Institute (TFI) found that nitrogen shipments to the E.U. reached 370,000 short tons in August 2022. That volume was double its prior year’s counterpart and was the highest monthly shipping volume since TFI began tracking U.S. fertilizer export data in 2013.
Weather
Yesterday’s showers and cooler temperatures in the Plains will shift into the Mississippi River Valley and Eastern Corn Belt today, according to NOAA’s short-term forecasts. The system brought beneficial rains to winter wheat crops on the Plains and will likely slow harvest activity in the Midwest today as it brings up to two inches of accumulation to Missouri, Illinois, and Indiana over the next 24 hours. Precipitation elsewhere in the region will likely be lighter during that time.
Any showers next week will likely dissipate by second half of the week, which should limit any potential harvest delays. NOAA’s 6-10-day forecasts are now trending warmer for the Upper Midwest and Eastern Corn Belt. Chances for rain are shifting into the Pacific Northwest, Eastern Corn Belt, and Southeast. Dry weather is likely to continue plaguing winter wheat conditions in the Southern Plains through the middle of next week.
The 8-10-day outlook is trending warmer and wetter for the Midwest and Plains, but the Southern Plains will continue to see slim chances for precipitation through the end of next week.
Financials
Yesterday, Chinese president Xi Jinping appointed several loyal allies to key government positions, all but ensuring that China’s government would continue to exert maximum control over the country’s stock markets. In the U.S., Chinese stocks bled a brutal $55 billion during yesterday’s trading session, despite gains recorded in all the major stock indices.
Wall Street is less confident in today’s batch of earnings reports, with the S&P 500 trading 0.19% lower to $3,802.00 at last glance on some technical selling, but also worries about a looming global recession. Energy prices fell as markets priced in slower Chinese buying paces and warmer than expected weather in Europe for this time of year.
What else I’m reading this morning on our website, FarmFutures.com:
Is it time to sell 2023 crops? Bryce Knorr points out that corn offers an easier path to profits next year.
Water Street Solutions’ Darren Frye has three proactive steps farmers should take to ensure a farm operation’s legacy.
Pinion’s (formerly K Coe Isom) Davon Cook is doing the math to resolve family conflicts on the farm.
Naomi Blohm explains why corn is still king.
Morning Ag Commodity Prices – 10/25/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.825
6.7775
6.7925
-0.0225
-0.33%
MAR ’23 CORN
$ / BSH
6.885
6.84
6.8525
-0.025
-0.36%
MAY ’23 CORN
$ / BSH
6.8775
6.8375
6.8475
-0.025
-0.36%
JUL ’23 CORN
$ / BSH
6.82
6.78
6.7875
-0.0275
-0.40%
SEP ’23 CORN
$ / BSH
6.355
6.3325
6.3325
-0.0225
-0.35%
DEC ’23 CORN
$ / BSH
6.2325
6.2
6.2025
-0.0225
-0.36%
AR2 ’24 CORN
$ / BSH
6.295
6.2775
6.29
-0.005
-0.08%
AY2 ’24 CORN
$ / BSH
6.305
6.2925
6.305
-0.0125
-0.20%
JUL ’24 CORN
$ / BSH
6.2825
#N/A
6.285
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
13.7725
13.66
13.7375
0.0175
0.13%
JAN ’23 SOYBEANS
$ / BSH
13.8625
13.755
13.825
0.0125
0.09%
MAR ’23 SOYBEANS
$ / BSH
13.945
13.8375
13.905
0.0125
0.09%
MAY ’23 SOYBEANS
$ / BSH
14.0175
13.92
13.98
0.015
0.11%
JUL ’23 SOYBEANS
$ / BSH
14.055
13.96
14.0175
0.015
0.11%
AUG ’23 SOYBEANS
$ / BSH
13.9225
13.83
13.86
-0.0075
-0.05%
SEP ’23 SOYBEANS
$ / BSH
13.61
#N/A
13.5725
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.495
13.44
13.455
0
0.00%
AN2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.4925
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.45
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.465
#N/A
13.44
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
72.41
71.45
71.6
-0.27
-0.38%
JAN ’23 SOYBEAN OIL
$ / LB
69.66
68.79
68.93
-0.23
-0.33%
DEC ’22 SOY MEAL
$ / TON
410.2
407
409.8
1.1
0.27%
JAN ’23 SOY MEAL
$ / TON
404
401.4
403.7
1.3
0.32%
MAR ’23 SOY MEAL
$ / TON
396.4
393.9
396.1
1.6
0.41%
MAY ’23 SOY MEAL
$ / TON
392.8
390.3
392.5
1.6
0.41%
JUL ’23 SOY MEAL
$ / TON
392.9
391
392.4
1.4
0.36%
DEC ’22 Chicago SRW
$ / BSH
8.4475
8.3
8.3575
-0.03
-0.36%
MAR ’23 Chicago SRW
$ / BSH
8.64
8.4975
8.5525
-0.03
-0.35%
MAY ’23 Chicago SRW
$ / BSH
8.74
8.6025
8.6575
-0.0275
-0.32%
JUL ’23 Chicago SRW
$ / BSH
8.7025
8.5875
8.6475
-0.0225
-0.26%
SEP ’23 Chicago SRW
$ / BSH
8.7225
8.635
8.6875
-0.0225
-0.26%
DEC ’23 Chicago SRW
$ / BSH
8.81
8.7025
8.765
-0.0175
-0.20%
AR2 ’24 Chicago SRW
$ / BSH
8.72
8.72
8.72
-0.0675
-0.77%
DEC ’22 Kansas City HRW
$ / BSH
9.43
9.2775
9.335
-0.045
-0.48%
MAR ’23 Kansas City HRW
$ / BSH
9.4175
9.2725
9.315
-0.055
-0.59%
MAY ’23 Kansas City HRW
$ / BSH
9.3825
9.265
9.295
-0.0625
-0.67%
JUL ’23 Kansas City HRW
$ / BSH
9.335
9.225
9.2375
-0.0725
-0.78%
SEP ’23 Kansas City HRW
$ / BSH
9.3275
9.2175
9.2275
-0.075
-0.81%
DEC ’23 Kansas City HRW
$ / BSH
9.2675
9.2625
9.265
-0.0825
-0.88%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.3
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.59
9.4775
9.4975
-0.08
-0.84%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.6525
9.5575
9.5725
-0.0775
-0.80%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.665
9.6175
9.63
-0.08
-0.82%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.725
9.6425
9.6425
-0.075
-0.77%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.39
#N/A
9.425
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
9.405
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.2925
0
0.00%
DEC ’21 ICE Dollar Index
$
112.065
111.655
111.915
0.006
0.01%
DE ’21 Light Crude
$ / BBL
85.09
83.06
83.46
-1.12
-1.32%
JA ’21 Light Crude
$ / BBL
84.08
82.14
82.48
-1.11
-1.33%
NOV ’22 ULS Diesel
$ /U GAL
3.9843
3.876
3.8785
-0.0416
-1.06%
DEC ’22 ULS Diesel
$ /U GAL
3.6161
3.5195
3.5263
-0.0409
-1.15%
NOV ’22 Gasoline
$ /U GAL
2.7524
2.6755
2.711
-0.0192
-0.70%
DEC ’22 Gasoline
$ /U GAL
2.514
2.4509
2.4739
-0.0245
-0.98%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
175.675
0
0.00%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
179.15
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
151.6
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
154.125
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
87.925
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
90.45
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.78
#N/A
21.8
0
0.00%
NOV ’22 Class III Milk
$ / CWT
21.05
#N/A
21.17
0
0.00%
DEC ’22 Class III Milk
$ / CWT
19.43
#N/A
19.52
0
0.00%
What else I’m reading this morning on our website, FarmFutures.com:Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
