Afternoon report: Corn, soybeans and wheat all move higher in Tuesday’s session
An unexpectedly harsh set of crop quality data from USDA yesterday helped push grain prices substantially higher today. Soybeans were the biggest benefactor, with nearby contracts jumping more than 4% higher after a wave of technical buying. Corn prices firmed more than 1%. Gains for wheat were somewhat variable, ranging from less than 0.1% to more than 1.4%.
Not much rain is expected across the central U.S. between Wednesday and Saturday, although some measurable moisture could be recorded in parts of North Dakota, Minnesota and Iowa during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts below-average precipitation for the Northern Plains and upper Midwest between August 16 and August 22, with cooler-than-normal conditions emerging in the eastern Corn Belt next week.
On Wall St., the Dow tilted 120 points lower in afternoon trading to 32,711 as investors remain focused on the latest inflation and interest rate trends. The next consumer price index will be released tomorrow. Energy futures were mostly higher this afternoon. Crude oil was trading near-even at just under $91 per barrel. Diesel futures leapt 5% higher, with gasoline up almost 3%. The U.S. Dollar softened slightly.
On Monday, commodity funds were net buyers of soyoil (+500) and CBOT wheat (+2,500) contracts but were net sellers of corn (-2,000), soybeans (-3,000) and soymeal (-2,000).
Corn
Corn prices made moderate inroads after USDA slashed quality ratings more severely than expected. Red-hot soybean prices lent additional support today. September futures added 7.25 cents to $6.1575, with December futures up 6.25 cents to $6.1350.
Corn basis bids were mostly steady across the central U.S. on Tuesday but did tilt as much as 10 cents higher at an Illinois river terminal and as much as 8 cents lower at an Iowa processor today.
Private exporters announced to USDA the sale of 5.2 million bushels of corn for delivery to China during the 2022/23 marketing year, which begins September 1.
Corn quality slumped three points lower this past week, with 58% of the crop now rated in good-to-excellent condition, per USDA’s latest report, out yesterday afternoon. Analysts had offered an average trade guess of 60% prior to today’s report. Another 26% of the crop is rated fair (up a point from last week), with the remaining 16% rated poor or very poor (up two points from last week).
USDA is now tracking three maturity stages for corn. Ninety percent of the crop is now silking, up from 80% last week and behind he prior five-year average of 93%. Nearly half (45%) is now at dough stage, versus 26% a week ago and the prior five-year average of 49%. And 6% of the crop is now dented, which is also behind the prior five-year average of 9%.
Ahead of Friday’s WASDE report from USDA, analysts expect the agency to show average corn yields at 175.9 bushels per acre, for a total production of 14.392 billion bushels. That would be a moderate decline from USDA’s July estimate of 14.505 billion bushels, if realized.
European Union corn imports during the 2022/23 marketing year have reached 78.3 million bushels through August 5, which is trending moderately higher than last year’s pace so far, according to the latest data from the European Commission.
Two more ships have departed from Ukrainian ports, bringing the total to 12 so far this month. The latest vessels were carrying 2.5 million bushels of corn, plus 5,300 metric tons of sunflower oil. Ukraine hopes to export a total of 60 million metric tons of grain that are either currently stored in silos or soon to be harvested.
Preliminary volume estimates were for 320,950 contracts, sliding slightly below Monday’s final count of 336,071.
Soybeans
Soybean prices surged higher as traders eyed fading quality ratings and the prospect for more hotter-than-normal weather later this month. August futures jumped 73.75 cents to $16.9325, with September futures climbing 49.25 cents to $15.1325.
Soybean basis bids were steady to mixed and offered quite a bit of variability on Tuesday, jumping as much as 30 cents higher at an Illinois river terminal and sliding as much as 10 cents lower at an Iowa processor today.
Soybean quality trended a point lower this past week, moving to 59% rated in good-to-excellent condition. Another 30% of the crop is rated fair (up a point from last week), with the remaining 11% rated poor or very poor (unchanged from last week).
Physiologically, 89% of the crop is now blooming, which puts it very close to 2021’s pace of 90% and the prior five-year average of 88%. And 61% is setting pods, up from last week’s mark of 44% but moderately behind the prior five-year average of 66%.
Prior to Friday’s WASDE report from USDA, analysts anticipate that the agency will show soybean yields at 51.1 bushels per acre, for a total production of 4.481 billion bushels. If realized, that would be slightly below USDA’s July estimate of 4.505 billion bushels.
European Union soybean imports during the 2022/23 marketing year reached 49.6 million bushels through August 5, which is slightly below last year’s pace so far. EU soymeal imports are fractionally lower year-over-year, with 1.42 million metric tons.
Brazil’s Anec is projecting the country’s soybean exports will reach 208.2 million bushels in August, which is moderately above the projection it made a week ago. Brazil’s corn exports are also on the rise, reaching an estimated 310.3 million bushels this month.
Preliminary volume estimates were for 154,178 contracts, moving moderately ahead of Monday’s final count of 107,857.
Wheat
Wheat prices captured variable gains after a round of technical buying today. MGEX spring wheat contracts fared the best amid tumbling crop conditions, with September futures rising 12.5 cents to $8.9325. Meantime, September Chicago SRW futures picked up 2 cents to $7.8175 and September Kansas City HRW futures added 4.75 cents to $8.5250.
Analysts didn’t expect to see changes in spring wheat ratings, but USDA served up a shocking drop. Ratings spilled six points lower, with 64% of the crop in good-to-excellent condition. Another 28% is rated fair (up five points from last week), with the remaining 8% rated poor or very poor (up a point from last week). Harvest is underway, with 9% of this season’s crop complete. That’s well behind 2021’s pace of 35% and the prior five-year average of 19%, however.
Winter wheat harvest is also progressing more slowly than it has in recent years. Through Sunday, 86% of the crop had been harvested, versus 82% the prior week. That leaves this year’s pace moderately slower than 2021’s mark of 94% and the prior five-year average of 91%.
European Union soft wheat exports for the 2022/23 marketing year have reached 91.5 million bushels through August 5, which is running slightly ahead of last year’s pace so far. EU barley exports are off to a sluggish start this marketing year, with 43.6 million bushels.
Japan issued a regular tender to purchase 3.0 million bushels of food-quality wheat from the United States and Canada that closes on Wednesday. Of the total, 30% is expected to be sourced from the U.S. The grain is for shipment in October.
The Philippines issued tenders to purchase 4.4 million bushels of wheat and 5.5 million bushels of animal feed barley from optional origins that closes on August 10. The grain is for shipment between October and January.
Iran issued an international tender to purchase 2.2 million bushels of milling wheat from optional origins that closes on Wednesday. The grain is for shipment in September and October, and Iran routinely purchases more than the nominal amount listed.
Preliminary volume estimates were for 117,542 CBOT contracts, which was slightly above Monday’s final count of 109,088.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
626
613.5
615.5
7.25
22-Dec
624.5
612.25
614
6.25
Soybeans
22-Sep
1520.25
1477.25
1512.25
49.25
22-Dec
1438.5
1408.75
1428.75
28.5
Soymeal $/ton
22-Sep
454.9
439
449.1
11.8
Soyoil cents/lb
22-Sep
66.38
65.2
65.76
0.31
Wheat $/bushel
22-Sep
801.25
772.75
781.5
2
22-Dec
821.25
792.25
799.25
0.5
KC Wheat
22-Sep
868.5
840.75
851.75
4.75
22-Dec
875.75
848.25
858.25
4
MPLS Wheat
22-Sep
903
881.25
892.75
12.5
22-Dec
916.75
894.25
906.5
12.25
Live Cattle cents/lb
22-Aug
138.3
137.9
138.125
-0.225
Feeder Cattle cents/lb
22-Sep
184.85
182.4
182.7
-2.95
Lean Hogs cents/lb
22-Oct
99.925
98.425
99.775
-0.525
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
92.65
89.05
90.56
-0.2
Diesel
22-Aug
3.3545
3.1812
3.345
0.1659
Unleaded Gasoline $/gallon
22-Aug
2.979
2.8562
2.9671
0.0809
Natural Gas
22-Oct
7.88
7.618
7.822
0.244
U.S. Dollar Index
22-Sep
106.31
105.855
106.255
-0.068
Gold $/ounce
22-Sep
1801
1784
1792.4
5.6
Copper
22-Aug
3.601
3.59
3.5935
0.006
Fertilizer Swaps
(as of 08/05)
DAP Tampa-index
912.5
-4
DAP-New Orleans
837.8
0
Urea-New Orleans
661.4
79.92
Urea-Middle East
765.0
57.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
439.8
0
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