Afternoon report: Wheat prices continue to slide lower, with corn narrowly mixed
Grain prices made moderate inroads overnight, but most of those gains evaporated as Friday’s session dragged on. Soybeans held onto gains of around 0.75% today following a round of bargain buying. Wheat shifted back into the red, incurring losses ranging between 0.4% and 0.6%. Corn closed with narrowly mixed results.
The upper Midwest and Great Lakes region will collect some additional snowfall between Saturday and Tuesday, while areas farther west and south are less likely to see any measurable moisture during this time, per NOAA’s latest 72-hour cumulative precipitation map. NOAA’s new 8-to-14-day outlook predicts more seasonally dry weather for the Corn Belt and Central and Southern Plains between November 25 and December 1, with warmer-than-normal conditions likely for the Plains.
On Wall St., the Dow firmed 68 points in afternoon trading to 33,614 as investors await the next batch of Q4 corporate earnings reports. The Down is on pace for a weekly loss of 0.5%, while Nasdaq is on track for a weekly loss of 2.1%. Energy futures were back in the red today, with crude oil down another 2% to $80 per barrel on Chinese demand concerns. Gasoline was also down around 2% today, with diesel trending around 0.25% lower.
On Thursday, commodity funds were net sellers of soybeans (-6,000), soymeal (-1,000), soyoil (-5,000) and CBOT wheat (-5,500) contracts. Funds were roughly even when trading corn contracts yesterday.
Corn
Corn prices failed to find much momentum in either direction on Friday, closing the session with narrowly mixed results as traders are set to enjoy a holiday-shorted Thanksgiving week in just a few days. December futures eased half a penny lower to $6.67, while March futures inched 0.25 cents higher to $6.6925.
Corn basis bids rose 5 to 13 cents higher at three Midwestern ethanol plants and were mixed across several other locations in the central U.S. on Friday.
Chinese corn imports in October reached 21.7 million bushels, per the latest available customs data. That was significantly below October 2021 levels. Year-to-date imports in 2022 are also down 27.5% year-over-year after reaching 748.4 million bushels.
“The first principle of marketing grain is to separate locking in the basis from locking in the futures price,” according to grain market analyst Roger Wright. “Why? Generally, basis weakens as futures price rises & vice versa.” Wright goes into greater detail in today’s Ag Marketing IQ blog – click here to learn more.
If it’s been a bit since you’ve visited FarmFutures.com, our Friday feature “7 ag stories you might have missed” is one of the easiest ways to catch up on the industry’s top headlines. The latest batch of content includes stories on the American Farm Bureau’s annual Thanksgiving cost survey, ethanol’s positive impact on fuel prices and more. Click here to get started!
Preliminary volume estimates were for 225,727 contracts, moving moderately below Thursday’s final count of 286,695.
Soybeans
Soybean prices boosted around 0.75% higher following a round of bargain buying on Friday. Drought in Argentina, among other factors, lent some short-term support. January futures firmed 10.5 cents to $14.2750, with March futures up 10.25 cents to $14.3250.
Soybean basis bids were mostly steady across the central U.S. but did tilt 5 cents higher at an Iowa river terminal while sliding 2 to 20 cents lower at two other Midwestern locations on Friday.
As the 2022 crop season winds to a close, so will our regular feature “Feedback from the Field,” which is has been updated throughout the year by Farm Futures grain market analyst Jaqueline Holland. Here’s your last chance to catch up on the latest farmer anecdotes and view the interactive map – click here to get started.
Brazilian consultancy P?tria AgroNeg?cios is expecting an uptick in planted acres for the 2022/23 season and also adjusted its production estimates higher, to 5.471 billion bushels – a record-breaking effort, if realized. However, the group also noted that climate forecasts could bring drier-than-normal conditions to the country’s South and Southwest production regions.
A government source speaking with Reuters anonymously indicated that Argentina is looking into the possibility of reinstating a special exchange rate for soybean farmers, a move that is intended to boost exports. Additional details were not immediately available, but we’ll provide updates if more official information is released.
Meantime, Argentina’s Buenos Aires grains exchange reported yesterday unless more rains arrive soon, it may make cuts to its acreage estimates. Plantings are only 12% complete, compared to 29% at the same time a year ago. Current projections are calling for 41.3 million acres. Argentina is the world’s No. 1 soymeal and soyoil exporter.
Preliminary volume estimates were for 97,256 contracts, tracking moderately lower than Thursday’s final count of 147,275.
Wheat
Wheat prices tested moderate overnight gains but were unable to hold onto them following another round of technical selling on Friday. December Chicago SRW futures fell 4.75 cents to $8.02, December Kansas City HRW futures dropped 3.75 cents to $9.3425, and December MGEX spring wheat futures faded 4.25 cents to $9.4950.
As the last few months have proven, Ukraine’s export abilities are highly dependent on the ability to ship cargo via the Black Sea. Unfortunately, there’s not currently a viable “Plan B” to move grain by truck and/or rail. The maximum export capacity via ground transportation is currently around 2.7 million metric tons (the equivalent of around 99 million bushels of wheat) per month, per data tabulated by European trade association Coceral.
Prolonged drought conditions in Argentina has the country’s Buenos Aires grains exchange slashing its estimates for the 2022/23 season by nearly 40% to 455.6 million bushels. Harvest is 10% complete through November 16.
French farm office FranceAgriMer reported that 97% of the country’s 2022/23 soft wheat crop has been planted as of November 14. The country struggled with widespread drought last season, but so far, weather has been mostly favorable for producing a high-quality, high-yielding crop. Nearly all (98%) of the crop is currently rated in good-to-excellent condition. France is Europe’s top wheat producer.
High commodity prices has lead to an increase in India’s wheat and canola acres, which are up 15% year-over-year, per the latest data from the country’s farm ministry. Inventories are at a multiyear low, creating additional incentive to replenish domestic stocks. India is the world’s No. 2 producer of wheat.
China’s wheat imports in October jumped 157% year-over-year to 45.6 million bushels. Cumulative wheat imports in 2022 are still 2.6% below last year’s pace, with 289.2 million bushels.
Preliminary volume estimates were for 70,718 CBOT contracts, which was moderately lower than Thursday’s final count of 95,136.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
672.75
665.25
667.75
-0.5
23-Mar
674
667.5
670
0.25
Soybeans
23-Jan
1430.75
1412.25
1428.25
10.5
23-Mar
1435.5
1417.5
1433.25
10.25
Soymeal $/ton
23-Jan
407.7
402.5
406.1
3.7
Soyoil cents/lb
23-Jan
71.09
69.58
70.61
0.46
Wheat $/bushel
22-Dec
816.5
800.25
803.25
-4.75
23-Mar
834
818.75
822
-4.75
KC Wheat
22-Dec
942.25
929
934.25
-3.75
23-Mar
933.5
918
923.75
-4.5
MPLS Wheat
22-Dec
958.5
949.5
951.5
-4.25
23-Mar
966.5
956.25
958.75
-5.75
Live Cattle cents/lb
22-Dec
153.3
152.5
152.925
0.175
Feeder Cattle cents/lb
23-Mar
183.375
181.75
182.825
0.325
Lean Hogs cents/lb
23-Feb
90.725
89.025
89.675
-1.125
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Dec
82.64
77.24
80.09
-1.55
Diesel
22-Dec
3.55
3.4101
3.5199
-0.0049
Unleaded Gasoline $/gallon
22-Dec
2.475
2.3537
2.4199
-0.0348
Natural Gas
23-Jan
6.831
6.425
6.784
0.04
U.S. Dollar Index
22-Dec
106.9
106.23
106.865
0.273
Gold $/ounce
22-Dec
1769.9
1749.2
1747.6
-13.2
Copper
22-Nov
3.659
3.636
3.636
-0.0535
Fertilizer Swaps
(as of 11/18)
DAP Tampa-index
700.0
0
DAP-New Orleans
764.5
-26.46
Urea-New Orleans
583.1
-28.66
Urea-Middle East
587.5
-60
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
599.7
-14.88
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