Afternoon report: Corn and wheat also fade into the red in Thursday’s session
Grain prices slumped lower on Thursday amid ample technical selling spurred by several different factors. Soybeans suffered the largest setback after some disappointing biodiesel blending recommendations were released earlier today. Corn and wheat prices also trended lower on general optimism that Black Sea exports are proceeding as well as they are able given the ongoing Russian invasion of Ukraine.
Some additional rain and snow should fall on most of the Midwest and Plains between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Few areas are likely to see significant accumulations during this time. NOAA’s new 8-to-14-day outlook predicts drier-than-normal conditions for much of the eastern Corn Belt between December 8 and December 14, with seasonally cool conditions likely for the central U.S.
On Wall St., the Dow dropped 198 points in afternoon trading to 34,390 as investors await the next round of jobs data out tomorrow. Sputtering retail stocks led the market lower today. Energy prices were mixed but mostly lower. Crude oil firmed 0.75% this afternoon to $81 per barrel. However, diesel dropped 3% and gasoline faded more than 1.5% lower. The U.S. Dollar softened substantially.
On Wednesday, commodity funds were net buyers of soybeans (+4,500), soymeal (+5,000) and CBOT wheat (+5,500) contracts but were net sellers of corn (3,500) and soyoil (-1,500).
Corn
Corn prices spilled more than 2% lower after a tepid round of export sales data from USDA this morning, coupled with spillover weakness from other commodities, spurred a round of technical selling on Thursday. December futures dropped 15 cents to $6.47, with March futures down 7.25 cents to $6.5975.
Corn basis bids were mostly steady to firm after rising 1 to 10 cents higher across five Midwestern locations on Thursday. An Iowa ethanol plant bucked the overall trend after dropping 5 cents lower today.
Private exporters announced to USDA the sale of 4.5 million bushels of corn for delivery to Mexico during the 2022/23 marketing year, which began September 1.
Corn exports saw 24.9 million bushels in old and new crop sales last week. That was on the very low end of trade estimates, which ranged between 18.7 million and 43.3 million bushels. Cumulative totals for the 2022/23 marketing year are off to a sluggish start compared to last year’s pace, with 227.3 million bushels.
Corn export shipments were also pedestrian, with 13.6 million bushels. Mexico, China, Japan, Canada and Honduras were the top five destinations.
South Korea purchased 2.6 million bushels of animal feed corn, likely sourced from South America or South Africa, in a private deal that closed earlier today. The grain is for arrival in March. The same purchasing group bought an additional 2.7 million bushels of animal feed corn from optional origins in an international tender that closed today. That grain is for shipment between late December and late January.
November is now behind us, and a look back showed the month wasn’t too kind to corn and wheat prices. “March corn finished down 29.75 cents for the month, while March Chicago wheat and March Kansas City wheat were down $1.0375 and $0.745 respectively,” according to Brian Splitt, technical analyst with AgMarket.net. “Much of the weakness in corn and wheat can be attributed to the extension of the Black Sea grain corridor, although it will need to be revisited again in March as the extension is only for 120 days.” Splitt takes a look ahead to see what factors are worth watching moving forward in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 199,745 contracts, inching slightly ahead of Wednesday’s final count of 199,539.
Soybeans
Soybean prices faltered on the heels of disappointing biodiesel mandate news (more on that below), along with fresh predictions for a record-breaking production in Brazil this season. That was enough to trigger a round of technical selling that slashed prices 2.5% lower. January futures lost 38 cents to $14.3150, with March futures down 37 cents to $14.3850.
Soybean basis bids were steady to mixed after rising 5 to 28 cents higher at three Midwestern locations while dropping 5 to 8 cents lower at three other Midwestern locations on Thursday.
Soybean exports saw 25.0 million bushels in old crop sales last week, with no additional new crop sales. That was toward the lower end of trade estimates, which came in between 17.5 million and 40.4 million bushels. Cumulative totals for the 2022/23 marketing year are trending moderately behind last year’ space, with 700.5 million bushels.
Soybean export shipments were more robust, reaching 77.8 million bushels. China, the Netherlands, Spain the United Kingdom and Mexico were the top five destinations.
The U.S. Environmental Protection announced its proposed Renewable Fuels Standard “Set” rule, which outlines biofuel blending requirements through 2025. Reactions were mixed, especially from biodiesel advocates. “The minor increases for biomass-based diesel volumes in 2023, 2024 and 2025 are below the industry’s existing production and ignore the clean fuels industry’s significant investments in new capacity,” per a statement from the Clean Fuels Alliance America. Click here to learn more.
Brazilian consultancy Datagro estimates that the country’s 2022/23 soybean production will rewrite the record books at 5.633 billion bushels and would be more than 21% better than last season’s drought-stricken effort, if realized. Farmers planted an estimated 108.2 million acres, marking the sixteenth consecutive season that soybean acres have increased.
Preliminary volume estimates were for 243,220 contracts, trending moderately above Wednesday’s final count of 160,471.
Wheat
Wheat prices followed other prices lower following a round of technical selling on Thursday that led to variable losses ranging between 0.1% and 1.7%. December Chicago SRW futures lost 12.75 cents to $7.5875, December Kansas City HRW futures dropped 11.5 cents to $9.0175, and December MGEX spring wheat futures eased 0.75 cents to $9.56.
Wheat exports totaled 6.0 million bushels in combined old and new crop sales last week. That was below the entire range of trade guesses, which came in between 11.0 million and 26.6 million bushels. Cumulative totals for the 2022/23 marketing year are slightly below last year’s pace, with 348.9 million bushels.
Wheat export shipments were a bit better, at just under 10.0 million bushels. Taiwan, Mexico, South Korea, Spain and Algeria were the top five destinations.
Algeria is thought to have purchased between 16.5 million and 18.4 million bushels of milling wheat from optional origins in an international tender that closed on Wednesday. Large amounts of the purchase is expected to be sourced from France, Germany and the Black Sea region. The grain is for shipment in January.
Thailand purchased 4.5 million bushels of animal feed wheat, likely sourced from Australia, in an international tender that recently closed. The grain is for shipment starting in January.
Taiwan issued an international tender to purchase 1.6 million bushels of grade 1 milling wheat from the United States that closes on December 7. The grain is for shipment between January 25 and February 8.
Preliminary volume estimates were for 67,919 CBOT contracts, which was slightly lower than Wednesday’s final count of 69,000.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
663.75
647
650
-15
23-Mar
669
659.25
660.5
-7.25
Soybeans
23-Jan
1469.75
1425.25
1429.75
-38
23-Mar
1475.75
1431.75
1436.75
-37
Soymeal $/ton
23-Jan
426.5
415.2
421.6
3.5
Soyoil cents/lb
23-Jan
71.31
67.38
67.38
-4.5
Wheat $/bushel
22-Dec
767.5
757.25
758.75
-12.75
23-Mar
797.25
780.5
783
-13.5
KC Wheat
22-Dec
911
895
903
-11.5
23-Mar
900
881.75
890.25
-11.25
MPLS Wheat
22-Dec
956
951.75
956.75
-0.75
23-Mar
942
930.25
938
-5.75
Live Cattle cents/lb
22-Dec
153.45
152.4
152.925
-0.15
Feeder Cattle cents/lb
23-Mar
184.45
183.2
184.275
0.825
Lean Hogs cents/lb
23-Feb
89.475
84.775
89.175
3.825
Crude Oil $/barrel
*Energy prices may not represent final settlements
23-Jan
83.34
79.93
81.4
0.85
Diesel
22-Dec
3.4103
3.2566
3.2639
-0.0996
Unleaded Gasoline $/gallon
22-Dec
2.4204
2.338
2.3454
-0.0393
Natural Gas
23-Feb
7.075
6.6
6.711
-0.107
U.S. Dollar Index
22-Dec
105.86
104.55
104.7
-1.197
Gold $/ounce
23-Jan
1810.9
1777.7
1803.2
57.2
Copper
22-Dec
3.8125
3.734
3.791
0.0615
Fertilizer Swaps
(as of 11/18)
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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