Afternoon report: Soybeans slump nearly 3% lower on Friday, in contrast
Analysts were expecting to see larger corn ending stocks and smaller soybean ending stocks in today’s quarterly grain stocks from USDA. But the agency flipped the script after reporting smaller-than-expected corn stocks and larger-than-expected soybean stocks (you can read our full report recap and analysis here). Prices shifted accordingly – corn prices tracked 1.25% higher, while soybean prices lost more than 3%. Wheat prices also saw plenty of tailwinds today, with most contracts capturing gains that ranged between 1.75% and 2.75%.
As Hurricane Ian continues to work its way up the East Coast, the Midwest and Plains continue to have little to no rainfall in store between Saturday and Tuesday, although the Dakotas, Minnesota and western Nebraska could at least see a little measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally warm, dry weather is mostly in store for the central U.S. between October 7 and October 13.
On Wall St., the Dow fell 258 points in afternoon trading to 28,967 as it puts a period on a terrible week, month and quarter. Investors remain acutely focused on the latest inflation trends, which don’t show many signs of slowing at this time. Energy futures slumped lower today. Crude oil dropped more than 2% to $79 per barrel. Diesel was down around 1.25%, while gasoline lost almost 1.5%. The U.S. Dollar softened slightly.
On Thursday, commodity funds were net buyers of corn (+2,500), soybeans (+2,000) and CBOT wheat (+8,500) contracts but were net sellers of soymeal (-1,000) and soyoil (-1,500).
Corn
Corn prices found favorable results after helpful USDA stocks data triggered a round of technical buying on Friday. December and March futures each added 8.5 cents to close at $6.78 and $6.8450, respectively.
Corn basis bids were mostly steady across the central U.S. on Friday but did tilt as much as 5 cents higher at an Ohio elevator and as much as 10 cents lower at an Illinois river terminal today.
USDA showed corn stocks in all positions at 1.38 billion bushels through September 1. That is 12% higher than year-ago levels of 1.235 billion bushels but sharply lower than June 1 totals of 4.346 billion bushels. It was also well below trade estimates of 1.512 billion bushels.
Of the new total, 510 million bushels of corn are being stored on farms, which is up 29% from a year ago. Off-farm stocks firmed 3% year-over-year to 867 million bushels. Total disappearance between June and August is 2.97 billion bushels, which is slightly higher than the 2.88 billion bushels during the same period in 2021.
The European Commission lowered its forecast for this season’s EU corn harvest by 6.4% in August down to a new estimate of 2.185 billion bushels. The continent has been struggling with intense heat and drought throughout the summer and into early fall. The European Commission also raised its estimates for 2022/23 EU corn imports to 826.7 million bushels.
French farm office FranceAgriMer reports that just over half (51%) of the country’s 2022 corn crop has been harvested as of September 26, jumping from 26% a week ago. The drought-damaged crop is getting harvested 18 days faster than the prior five-year average. FranceAgriMer docked crop quality another two points, with 41% rated in good-to-excellent condition.
South Korea purchased 2.4 million bushels of animal feed corn in a private deal on Friday after cancelling an international tender for a similar amount. The grain is likely sourced from South American or South Africa and is for shipment in November.
Preliminary volume estimates were for 357,527 contracts, trending well above Thursday’s final count of 267,553.
Soybeans
Soybean prices faced sharp losses on Friday after USDA unexpectedly showed larger ending stocks, which spurred a round of technical selling. The specter of a likely record-breaking Brazilian crop is beginning to loom in the background as well. (Granted, it’s very early in the season, but South American production will be a big deal in the coming months.) November futures lost 44.75 cents to $13.66, with January futures down 45.5 cents to $13.75.
Soybean basis bids were steady to mixed after rising 5 cents higher at two Midwestern processors and spilling as much as 15 cents lower at an Illinois river terminal on Friday.
Soybean stocks in all positions moved 7% higher from a year ago to 274 million bushels as of September 1. That’s a bit higher than the average trade guess of 242 million bushels but still well below June totals of 971 million bushels.
On-farm storage is 62.9 million bushels, which is 8% lower from last September. Off-farm stocks increased 12% from a year ago to 211 million bushels. Disappearance between June and August totaled 698 million bushels, which is 36% above the same period in 2021.
How are your crops looking right now? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
Preliminary volume estimates were for 282,556 contracts, moving slightly above Thursday’s final count of 273,812.
Wheat
Wheat prices jumped substantially higher after USDA sharply lowered its 2022 production estimates, and as Russia is annexing parts of Ukraine and creating even more turmoil in the Black Sea region. December Chicago SRW futures climbed 27 cents to $9.2325, December Kansas City HRW futures rose 25.5 cents to $9.9225, and December MGEX spring wheat futures gained 17.75 cents to $9.8375.
All-wheat stocks shifted slightly higher, moving to 1.78 billion bushels through September 1. That’s less than 1% above year-ago totals. It’s well above June’s tally of 660 million bushels and slightly higher than the average trade guess of 1.776 issued prior to today’s report.
Of that total, 591 million bushels are being stored on farms, up 41% from last September. Off-farm stocks are down 13% year-over-year to 1.18 billion bushels. Disappearance between June and August totaled 543 million bushels, trending 24% below the same period a year ago.
USDA also showed lower-than-expected 2022 production estimates in another report – the agency’s annual Small Grain Summary. USDA’s latest estimates are for 1.650 billion all-wheat bushels, which was well below analyst estimates of 1.778 billion bushels and USDA’s August tally of 1.783 billion bushels.
Pakistan passed on all offers for its international tender to purchase 11.0 million bushels of wheat that closed earlier this week. A similar tender is likely to be issued soon, especially considering the fallout from devastating floods that caused an estimated $30 billion in damages earlier this year.
Preliminary volume estimates were for 104,037 CBOT contracts, tracking 65% higher than Thursday’s final count of 62,466.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
696.25
669.25
677.5
8.5
23-Mar
702
675.75
684
8.5
Soybeans
22-Nov
1425.75
1363.25
1364.75
-44.75
23-Jan
1435
1374.25
1375.5
-45.5
Soymeal $/ton
22-Dec
414
402.4
403
-4.2
Soyoil cents/lb
22-Dec
64.43
61.31
61.56
-2.53
Wheat $/bushel
22-Dec
945.75
892.75
921.5
27
23-Mar
954
905
932
24.75
KC Wheat
22-Dec
1010.75
963.5
991.5
25.5
23-Mar
1004.5
961
985.25
21.75
MPLS Wheat
22-Dec
1001.25
961
982
17.75
23-Mar
1003.25
967
985
16.75
Live Cattle cents/lb
22-Oct
144.5
143.225
143.4
-0.725
Feeder Cattle cents/lb
22-Oct
178.35
174.375
174.7
-3.125
Lean Hogs cents/lb
22-Dec
77.2
75.775
76.4
0.675
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Nov
82.56
79.14
79.48
-1.75
Diesel
22-Oct
3.4047
3.3299
3.3745
-0.0401
Unleaded Gasoline $/gallon
22-Oct
2.5098
2.434
2.4724
-0.0352
Natural Gas
22-Nov
7.322
6.99
7.115
-0.027
U.S. Dollar Index
22-Dec
112.7
111.54
112.095
-0.107
Gold $/ounce
22-Nov
1678.8
1663.4
1663.6
5.1
Copper
22-Oct
3.4825
3.429
3.4825
0.0425
Fertilizer Swaps
(as of 09/30)
DAP Tampa-index
725.0
-25
DAP-New Orleans
832.3
-8.27
Urea-New Orleans
680.7
-22.05
Urea-Middle East
767.5
-82.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
578.7
0
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