Afternoon report: Corn and wheat also make solid inroads in Thursday’s session.
Grain prices made significant advances after an ample round of technical buying on Thursday. Soybeans led the way with gains of around 4% as traders continue to look at mid-range forecasts that are suggesting a return to hot, dry weather for much of the central U.S. later in August. Wheat prices mostly trended 1.5% to 2.5% higher, while corn prices firmed 1.75% and moved back above the $6 per bushel benchmark.
Rainy weather is likely in large portions of the central U.S. between Friday and Monday, with parts of Minnesota and Wisconsin gathering another 2″ or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts a return to seasonally hot, dry weather for most of the Corn Belt between August 11 and August 17.
On Wall St., the Dow slipped 75 points lower in afternoon trading to 32,736 as investors await the next round of jobs data arrives on Friday. Some experts are estimating the jobless rate will hold steady from July’s mark of 3.6%. Energy prices were in the red, with crude oil down more than 2% this afternoon to fall below $89 per barrel as investors continue to weigh recession worries. Diesel also dropped 2%, with gasoline down 3.75%. The U.S. Dollar softened moderately.
On Wednesday, commodity funds were net sellers of soybeans (-7,000), soymeal (-4,000), soyoil (-2,000) and CBOT wheat (-5,000). Funds were roughly even trading corn contracts yesterday.
Corn prices shifted 1.75% higher on a round of technical buying as traders continue to monitor hot, dry forecasts expected later in August. Spillover strength from soybeans and wheat lent additional support. September futures gained 10.75 cents to $6.0225, with December futures up 9.75 cents to $6.06.
Corn basis bids were largely steady across the central U.S. but did shift 18 to 30 cents lower at two Midwestern locations on Thursday.
Old and new crop corn sales totaled 12.4 million bushels last week. That was on the lower end of trade estimates, which ranged between 3.9 million and 27.6 million bushels. Cumulative sales for the 2021/22 marketing year are still running moderately behind last year’s pace, with 2.221 billion bushels.
Corn export shipments were more robust, with 40.2 million bushels. China, Mexico, Japan, Canada and Honduras were the top five destinations.
The August WASDE report from USDA is not typically a big “market mover.” Will this year prove to be different, however? Naomi Blohm, senior market adviser with Stewart Peterson, explores the possibilities in today’s Ag Marketing IQ blog – click here to learn more.
A group of more than 400 agricultural trade associations, agribusinesses and farmer co-ops are leaning on Senate leadership to pass a bill that will make meaningful reforms to the agriculture workforce. The bill provides solutions that the industry “needs to defend our national security through protecting our domestic agricultural production and curtailing rising food costs for every consumer,” according to a letter sent by the group. Farm Futures policy editor Jacqui Fatka did additional reporting on the situation – click here to learn more.
Preliminary volume estimates were for 200,430 contracts, sinking moderately below Wednesday’s final count of 291,207.
Soybean prices rose steadily throughout Thursday’s session on concerns that hot, dry weather will soon return to the central U.S. despite some additional rains still expected later this week. August futures climbed 60 cents to $16.18, with September futures up 59.5 cents to $14.6325.
Soybean basis bids were largely steady across the central U.S. on Thursday but did tilt substantially lower at an Iowa river terminal and an Iowa processor today
Soybeans saw slight net reductions in old crop sales last week, but decent new crop sales brought the total balance to 14.7 million bushels. That was near the middle of analyst expectations, with trade guesses ranging between 3.7 million and 33.1 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 1.980 billion bushels.
Soybean export shipments improved 19% above the prior four-week average, with 19.4 million bushels. Mexico, the Netherlands, China, Japan and Algeria were the top five destinations.
How accurate are USDA’s August yield forecasts versus the agency’s final estimates? Brian Basting, commodity research analyst for Advance Trading, looked at the numbers for both corn and soybeans stretching back to 1991. To find out what he discovered, be sure to read his recent Ag Marketing IQ blog – click here for more.
Preliminary volume estimates were for 147,732 contracts, moving slightly ahead of Wednesday’s final count of 140,125.
Wheat prices followed other grains higher on Thursday on a round of bargain buying after falling to multi-month lows earlier this week. Additional price support came from rising corn and soybean prices today. September Chicago SRW futures gained 18 cents to $7.8175, September Kansas City HRW futures rose 23.5 cents to $8.59, and September MGEX spring wheat futures added 12.25 cents to $8.8750.
Wheat export sales eroded 55% below the prior four-week average, to 9.2 million bushels. That was on the very low end of trade estimates, which ranged between 7.3 million and 20.2 million bushels. Cumulative totals for the 2021/22 marketing year have seen a moderate decline from last year’s pace so far, with 91.6 million bushels.
Wheat export shipments trended 10% higher than the prior four-week average, with 10.6 million bushels. Mexico, Taiwan, South Korea, Guatemala and Colombia were the top five destinations.
Japan has purchased 4.5 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 45% was sourced from the U.S. The grain is for shipment in October.
Taiwan purchased 1.9 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain is for shipment between September 21 and October 5.
Iran is thought to have purchased between 6.6 million and 8.8 million bushels of milling wheat from Russia, according to European traders. The grain is comprised of three or four consignments that will be shipped in September and October. Iran is suffering a domestic deficit due to drought and may need to import as much as 220 million bushels this marketing year.
Preliminary volume estimates were for 82,034 CBOT contracts, tracking moderately below Wednesday’s final count of 106,074.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
cents/bu
22-Sep
607
585.75
602.25
10.75
22-Dec
610.75
590.5
606.25
9.75
Soybeans
22-Sep
1466.5
1396
1461.25
59.5
22-Dec
1424
1359.5
1417.75
49.25
Soymeal $/ton
22-Sep
455.7
430
453.5
21.5
Soyoil cents/lb
22-Sep
62.81
61.03
62.45
0.68
Wheat $/bushel
22-Sep
789.5
758.25
782.5
18
22-Dec
808.25
778
802
17.75
KC Wheat
22-Sep
865.25
831
860.25
23.5
22-Dec
873
840
868
23
MPLS Wheat
22-Sep
903.25
872.75
894.25
12.25
22-Dec
916.75
889
908.75
13.25
Live Cattle cents/lb
22-Aug
138.05
137.475
137.7
-0.2
Feeder Cattle cents/lb
22-Sep
183.375
181.25
182.4
-0.5
Lean Hogs cents/lb
22-Oct
98.05
93.825
97.675
1.825
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
91.9
87.55
88.43
-2.23
Diesel
22-Aug
3.4548
3.2813
3.3221
-0.0927
Unleaded Gasoline $/gallon
22-Aug
2.937
2.7575
2.7829
-0.1293
Natural Gas
22-Oct
8.432
7.8
8.162
-0.1
U.S. Dollar Index
22-Sep
106.41
105.6
105.62
-0.757
Gold $/ounce
22-Sep
1795.5
1764.1
1791.9
33.9
Copper
22-Aug
3.5085
3.46
3.5085
0.039
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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