Morning report: Corn, soybeans and wheat all test modest gains ahead of Friday’s session. (Comments are updated by 7:30 a.m. Central Time.)
Overnight trends:
Corn: Up 2 to 3 cents
Soybeans: Up 3 to 5 cents
Wheat: Mixed
Grain prices have largely struggled throughout the summer so far as analysts have assessed uneven global demand and the prospect for solid U.S. production this season, despite some ongoing challenges with hot, dry weather in recent weeks. Excessive heat later this month may attract some technical buying on Friday, however, with overnight action testing modest gains for corn, soybeans and some wheat contracts.
Overseas stock markets were mixed again on Friday. In Asia, markets ranged between 0.5% gains in Japan and 1.5% losses in China. European markets firmed 0.5% to 1.5% in midday trading. On Wall St., Dow futures trended 106 points higher overnight to 30,708 as investors await some key bank earnings reports later today.
Energy futures were in the green overnight. Crude oil firmed 1.75% to $97 per barrel on the latest Middle Eastern production trends. Gasoline also rose 1.75% higher, with diesel up around 0.75%. The U.S. Dollar softened moderately.
The latest 72-hour precipitation map from NOAA shows a much better chance for rains in the Midwest – particularly in the eastern Corn Belt, which could see another 1″ to 1.5″ fall between today and Monday. Official 6-to-10-day forecasts show mostly drier-than-normal conditions returning to the Midwest and Plains between July 20 and 24. Seasonally hot weather is very likely for most of the country during this time.
On Thursday, commodity funds were net buyers of corn (+6,000) and soymeal (+1,500) contracts but were net sellers of soybeans (-5,000), soyoil (-2,500) and CBOT wheat (-3,500).
Corn
Corn prices tested gains of around 0.75% overnight, suggesting a round of bargain buying may be in store for Friday’s session. Prices have slumped well below multiyear highs captured earlier this year, but increasingly unfavorable forecasts later and July could keep prices firm or at least sideways in the near term.
Corn basis bids showed some extreme variability on Thursday, moving as much as 24 cents higher at an Ohio river terminal while tumbling as much as 45 cents lower at an Illinois river terminal yesterday.
Old and new crop corn exports reached 16.0 million bushels last week, which was a bit on the higher end of trade estimates ranging between zero and 27.6 million bushels. Cumulative totals for the current marketing year are now at 2.103 billion bushels, which is moderately behind last year’s pace. Corn export shipments shifted 24% below the prior four-week average, with 36.1 million bushels. China, Japan, Mexico, Morocco and Canada were the top five destinations.
French farm office FranceAgriMer estimates that 83% of the country’s 2022 corn crop is in good-to-excellent condition through July 11, versus 84% a week ago and down moderately from year-ago results of 89%.
Grain prices are beholden to a plethora of supply and demand fundamentals, but what pressure do outside forces also apply? Farm Futures grain market analyst Jacqueline Holland took a closer look in her latest E-corn-omics blog – click here to learn more.
The preliminary report from the CBOT showed daily futures volume drop again to 283,484, with open interest also down another 11,834. Options volume rose slightly, to 126,335 and still moderately favors calls (79,879) over puts (46,456). Implied volatility for near-the-money September contracts shifted slightly higher to 43.9% with another 41 days until expiration.
Soybeans
Soybean prices face an uphill battle overall with ongoing questions about Chinese demand, along with the expectations for a solid 2022 season in the U.S. and a likely rebound in Brazilian production this coming season. Prices tested moderate gains of around 0.5% overnight but remain several dollars below multiyear highs captured earlier this year.
On Thursday, soybean basis bids were steady to weak, especially at interior river terminals, where bids fell 5 to 15 cents lower across four locations. Bids tumbled by as much as 70 cents lower at an Illinois processor yesterday.
Old crop soybean sales spilled to a marketing year low last week after facing net reductions of 13.3 million bushels. New crop sales added 4.2 million bushels, leaving a negative balance of 9.1 million bushels. That was also below the entire range of trade guesses, which ranged between net reductions of 3.7 million and net sales of 18.4 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 1.931 billion bushels.
Soybean export shipments tracked 16% lower than the prior four-week average, with 16.2 million bushels. China, Mexico, the Netherlands, Germany and Egypt were the top five destinations.
China plans to auction off another 18.4 million bushels of its state imported soybean reserves on July 22. The country has offered a series of similarly sized auctions throughout 2022 in an attempt to shore up local supplies and dampen high prices.
If it’s been awhile since you’ve ventured onto FarmFutures.com, our Friday feature “7 ag stories you might have missed” is an easy way to quickly catch up on the ag industry’s top headlines. The latest batch of content includes stories on a trucker protest in California, a “best-practices” look at machinery purchases and more. Click here to get started.
The preliminary report from CBOT showed daily futures volume improving to 151,426 with open interest sliding 472 lower. Options volume firmed to 48,763 and still moderately favor calls (48,763) over puts (17,770). Implied volatility for near-the-money August contracts bumped up to 34.2% and expire in six days.
Wheat
Wheat prices continue to struggle to find positive momentum, despite a surprisingly good set of export sales data from USDA yesterday. Overnight gains were mixed but mostly higher, but contracts were only able to firm around 0.25% to 0.5% higher heading into Friday’s session. Harvest progress across the Northern Hemisphere continues to dampen price prospects for now.
Wheat exports were much better than expected last week, with 37.4 million bushels in old crop sales plus another 1.1 million bushels of new crop sales. That was far above all trade guesses, which ranged between 7.3 million and 18.4 million bushels. Cumulative totals for the 2022/23 marketing year are still slightly below last year’s pace, with 63.1 million bushels.
Wheat export shipments slipped 13% below the prior four-week average, to 9.9 million bushels. South Korea, Mexico, Guatemala, Taiwan and Peru were the top five destinations.
French farm office FranceAgriMer estimates that 50% of the country’s soft wheat harvest is complete through July 11 – jumping up from 14% a week ago and trending well ahead of last season’s pace so far. Crop quality firmed by a point, with 64% rated in good-to-excellent condition.
The Philippines purchased 4.0 million bushels of animal feed wheat from optional origins in a tender that closed earlier today. The grain is for shipment between early October and late November, depending on the source.
The preliminary report from CBOT showed daily SRW volume move up to 104,195, with open interest trending 865 higher. Options volume improved to 35,609 and favors puts (20,873) over calls (14,736). Implied volatility for September near-the-money options increased to 45.5% and expires in 41 days.
Volume in HRW wheat moved to 33,337, with open interest trending 451 higher. Options volume is at 1,240 and still favors calls (814) over puts (426).
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
