Afternoon report: Corn prices also make moderate inroads, while wheat slumps lower
Grain prices were mixed on Thursday after some uneven technical maneuvering. Soybeans saw the most upside, with prices firming 1.25% higher after USDA released a better-than-expected round of export data this morning. Corn prices were also in the green, moving around 0.5% higher. CBOT wheat saw substantial cuts, in contrast, and fell for the fifth consecutive session as Ukrainian shipments pick up amid already uncertain U.S. demand.
The latest updates to the U.S. Drought Monitor, released this morning, show 66.6% of the United States is covered by some level of drought through August 16. Regional variances are significant, with the bulk of the problems occurring in the West. For the Midwest, 33.2% of the region is currently affected, while in the High Plains, that percentage jumps to 78.0%. NOAA’s 8-to-14-day outlook shows the likelihood of seasonally wet weather in store for the Southern Plains and parts of the eastern Corn Belt between August 25 and August 31.
On Wall St., the Dow dipped 43 points lower in afternoon trading to 33,936 after a mixed round of retail earnings reports. Energy futures pushed higher, with crude oil up 3.25% this afternoon to $91 per barrel on tightening supplies. Gasoline was also up more than 3%, while diesel firmed 1.25%. The U.S. Dollar firmed significantly.
On Wednesday, commodity funds were net buyers of corn (+1,500), soybeans (+3,000) and soymeal (+1,500) contracts but were net sellers of soyoil (-1,500) and CBOT wheat (-9,000).
Corn
Corn prices rose moderately higher on a round of technical buying partly triggered by healthy export demand and lingering questions about this season’s production potential. Spillover strength from soybeans lent additional support. September futures added 4 cents to $6.19, with December futures up 3 cents to $6.15.
Corn basis bids were mostly steady to mixed after falling 5 to 15 cents lower at two Midwestern processors and 10 cents at an Illinois ethanol plant on Thursday. An Illinois river terminal bucked the overall trend, firming 4 cents today.
Old crop corn sales came in at 3.9 million bushels last week, and new crop sales came in at 29.5 million bushels, for a total of 33.4 million bushels. That was toward the higher end of trade estimates, which ranged between 11.8 million and 43.3 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 2.273 billion bushels.
Corn export shipments trended 33% below the prior four-week average, with 24.5 million bushels. China, Mexico, Trinidad and Tobago, Panama and Honduras were the top five destinations.
The International Grains Council trimmed its estimates for global corn production in 2022/23 by 10 million metric tons (approximately 393 million bushels) to 1.179 billion metric tons. The new estimate is largely due to lower production potential in the United States and the European Union. In contrast, the IGC raised its forecast for global 2022/23 wheat production by 293.9 million bushels for a new projection of 28.587 billion bushels.
In Argentina, corn plantings are expected to decline 2.6% from a year ago, which the Buenos Aires Grains Exchange attributes to worries over lower profitability versus alternative crop options. The planting footprint for the upcoming season is expected to reach 19.768 million acres.
In July, China imported a total of 60.6 million bushels, according to newly available customs data. That brings total corn imports this year up to 595.6 million bushels – a 16.7% decrease versus 2021’s pace so far.
Last season’s corn production efforts in Brazil were disappointing after widespread weather problems. But production in 2021/22 is expected to rebound nearly 33% higher, per a poll of 11 analysts, who offered an average production estimate of 4.558 billion bushels – a record, if realized.
Preliminary volume estimates were for 211,163 contracts, rising moderately above Wednesday’s final count of 167,144.
Soybeans
Soybean prices grabbed double-digit gains on Thursday after a better-than-expected round of export sales led to some bullish sentiment and triggered a round of technical buying. September futures rose 20.25 cents to $14.9550, with November futures up 15.25 cents to $14.0525.
Soybean basis bids were steady to mixed on Thursday after sliding 15 cents lower at an Iowa river terminal while jumping 20 to 35 cents higher at two other Midwestern locations today.
Old crop soybean sales reached 3.6 million bushels last week, and new crop sales climbed to 47.9 million bushels, for a total of 51.5 million bushels. That easily exceeded the entire range of trade guesses, which came in between 7.3 million and 34.9 million bushels. Cumulative totals for the 2021/22 marketing year are still slightly behind last year’s pace, with 2.039 billion bushels.
Soybean export shipments shifted 19% above the prior four-week average, to 25.4 million bushels. China, Mexico, the Netherlands, South Korea and Spain were the top five destinations.
China, which is sitting on the world’s largest grain stockpile, is setting up a joint venture with Sinograin and COFCO to manage these massive reserves more efficiently. The joint venture will be called the China Enterprise United Grain Reserve Co. Ltd. And will be 51% owned and controlled by Sinograin.
Preliminary volume estimates were for 122,424 contracts, shifting slightly above Wednesday’s final count of 103,652.
Wheat
Wheat prices continued to slump lower on news that more Ukrainian ships are sailing from the country’s Black Sea ports. A disappointing set of export data from USDA this morning generated additional headwinds. September Chicago SRW futures dropped 32.75 cents to $7.3050, September Kansas City HRW futures lost 39.25 cents to $8.1175, and September MGEX spring wheat futures fell 31.5 cents to $8.52.
Wheat export sales fell to a marketing-year low of 7.6 million bushels last week. That was also below all analyst estimates, which ranged between 9.2 million and 23.9 million bushels. Cumulative totals for the 2021/22 marketing year have started off moderately below last year’s pace, with 127.1 million bushels.
Wheat export shipments were a bit better, trending 1% above the prior four-week average to 12.8 million bushels. The Philippines, Mexico, Brazil, Japan and Portugal were the top five destinations.
Turkey and Ukraine have signed a deal today to repair infrastructure that has been damaged during the ongoing Russian invasion. Presidents Erdogan and Zelenskiy met this week in the Ukrainian city of Lviv. A few dozen vessels loaded with grain have departed from Ukrainian ports since the beginning of August, with cargo totaling 622,000 metric tons.
China imported 28.7 million bushels of wheat in July, bringing cumulative totals for 2022 up to 210.2 million bushels. That’s a year-over-year decline of 8.4% so far.
Taiwan issued an international tender to purchase 1.3 million bushels of grade 1 milling wheat sourced from the United States that closes on August 25. The grain is for shipment between October 12 and October 26.
Preliminary volume estimates were for 118,808 CBOT contracts, which was moderately above Wednesday’s final count of 85,386.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
624
608.25
619.75
4
22-Dec
620.5
604
615.75
3
Soybeans
22-Sep
1499.75
1467.25
1495.5
20.25
22-Nov
1413
1376.5
1405.25
15.25
Soymeal $/ton
22-Oct
416.3
404.5
413
8
Soyoil cents/lb
22-Oct
66.44
63.89
64.8
-1.3
Wheat $/bushel
22-Sep
766.5
725.75
731.5
-32.75
22-Dec
783.5
743.25
749
-32.5
KC Wheat
22-Sep
853.5
807.5
812.5
-39.25
22-Dec
855.5
808.5
815.25
-38.5
MPLS Wheat
22-Sep
884.5
850
852.75
-31.5
22-Dec
895
861.75
864.75
-31.25
Live Cattle cents/lb
22-Aug
142
141.2
141.2
-0.55
Feeder Cattle cents/lb
22-Sep
187.35
184.9
184.9
-2.225
Lean Hogs cents/lb
22-Dec
88
85
85.05
-3.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
91.46
87.32
90.54
2.43
Diesel
22-Sep
3.6874
3.5817
3.6498
0.0324
Unleaded Gasoline $/gallon
22-Sep
3.0539
2.9314
3.0264
0.0919
Natural Gas
22-Oct
9.64
8.862
9.181
-0.047
U.S. Dollar Index
22-Sep
107.495
106.425
107.44
0.954
Gold $/ounce
22-Sep
1771
1754.6
1753.4
-6.9
Copper
22-Aug
3.598
Fertilizer Swaps
(as of 08/12)
DAP Tampa-index
887.5
-25
DAP-New Orleans
829.5
-8.27
Urea-New Orleans
620.6
-40.79
Urea-Middle East
762.5
-2.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
440.9
1.1
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