Morning report: Soybeans win big, corn and soy follow higher as China eases its Zero-COVID policy and domestic inflationary pressures calm down. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 2-4 cents
Soybeans up 15-24 cents, Soymeal up $4.40/ton, Soyoil up $1.22/lb
Chicago wheat up 2-3 cents, Kansas City wheat up 6-7 cents, Minneapolis wheat up 5-6 cents
*Prices as of 7:00am CST.
Happy Veteran’s Day! My team and I are so proud to live in the land of the free thanks to the sacrifices of the brave and their families. My uncle, who is also a veteran, reminds me that the history of the armed forces is largely a reflection of our country’s history and is comprised of the stories of the millions of individuals who have served in the armed forces.
What a history it is. A day does not seem enough to thank veterans and their families for their sacrifice. Thank you today – and always – for your service!
Feedback from the Field updates – last week of the season! How is harvest progressing on your farm this fall?! Click this link to take the survey and share updates about your farm’s harvest progress. I review and upload results daily to the FFTF Google(TM) MyMap, so farmers can see others’ responses from across the country – or even across the county!
Responses are starting to slow as many growers are wrapping up for the year, so our time together in FFTF this growing season will also come to an end in the next. So be sure to drop any insights you’d like to share with us from the 2022 season at this link and I will share them on our map as well as in my last column of the season next Tuesday as harvest season winds down. Thanks! -JH
Corn
There has been a lot to celebrate on Wall Street over the past 24 hours and that sentiment is already trickling down to Main Street this morning. I’ll dive deeper into those factors in the Finance section below, but here are the quick hits as to how those factors are impacting ag markets this morning.
A rally in the energy markets and easing pressure on the dollar helped lift U.S. corn prices $0.03-$0.04/bushel this morning after softer inflation readings yesterday and news that China would begin easing its zero-COVID policy revived hopes for global demand (export) prospects.
“Wheat, corn and soybeans are being strengthened today by the weaker dollar, which is positive for U.S. export sales, and stronger outside markets,” Matt Ammermann, StoneX commodity risk manager, told Reuters this morning. “After weakness earlier this week markets cannot ignore the weaker dollar today.”
“Regardless of whether the favorable news on U.S. inflation will actually spark a longer-term change in U.S. interest rate policy, the markets are in an emotional mood and are reacting to the dollar’s weakness. Agricultural markets are also seeing support on news of COVID easing by China even though cases are still on the rise.”
Soybeans
Soybeans were the primary beneficiary of the past 24 hours of favorable news from Wall Street, rising $0.15-$0.24/bushel overnight as the eased Chinese COVID policies planted the seed for more pork and soyoil demand from the world’s largest soybean buyer.
The surge in energy prices, base metal futures, and Wall Street equity indices on softened U.S. inflation in October 2022 also supported soy’s gains during the overnight trading session.
Wheat
The dollar weakened as lower inflation and revived hopes for Chinese demand eased global investors’ uncertain current outlook on the global macroeconomic landscape overnight. Those prospects sent U.S. wheat futures up $0.02-$0.08/bushel overnight, with Chicago SRW futures comfortably resting above the $8/bushel benchmark this morning.
Wheat’s gains were limited as uncertainty continues to hover over the viability of Black Sea shipping corridors. The U.N. will meet with Russian representatives in Switzerland today to discuss an extension of the Black Sea Grains Initiative, which is scheduled to expire a week from tomorrow (Nov. 19).
“Markets are also nervously waiting on news about the negotiations to extend the Ukrainian safe shipping channel,” Ammermann said. “If there is no extension, this would sharply tighten global grain export supplies.”
Rail strike
The Brotherhood of Maintenance Way Employees Division of the International Brotherhood of Teamsters (BMWED) extended its cooling-off period to now end on December 4 instead of November 19, averting a rail strike that would otherwise have started halting fertilizer and grain flows across the U.S.
The BMWED is the country’s third largest railway workers’ unions. It rejected the deal proposed by the Biden administration back in September in protest of the lack of sick time provided by rail companies in the agreement.
What does this mean? For now, trains will continue to run without the delay of a strike. In the meantime, the union will continue to negotiate with the railways in hopes of finding a deal that will satisfy both parties and keep trains running.
But we aren’t out of the clear yet. Rather, we just kicked the can down the road for a couple more weeks.
Two other rail workers’ unions, the Brotherhood of Locomotive Engineers and Trainmen (BLET), and the Smart Transportation Division (SMART-TD) will need to ratify the deal negotiated in September under President Biden on November 21. If the unions do not agree with the proposed agreement, they could begin a strike by December 9.
“This agreement to extend the cooling off period affords all unionized employees the opportunity to vote on their agreements free of a looming strike threat,” Association of American Railroads President and CEO Ian Jefferies said in a statement. “Our goal remains the same – successfully completing this round of bargaining – and we stand ready to reach an agreement with BMWED based upon the Presidential Emergency Board’s recommendations.”
Weather
It’s going to be a soggy day in the Eastern Corn Belt as remnants of Hurricane Nicole douse Ohio with over two inches of rain today, according to NOAA’s short-term forecasts. Skies are likely to remain clear over the rest of the Heartland today.
NOAA’s 6-10-day forecasts are now trending much cooler than normal for the middle of the month across most of the country. Chances for rain will be below normal in the Midwest and Central and Southern Plains, though the far Western Plains and Southwest could see an above average chance of precipitation during that time.
Those trends will begin to shift slightly in the 8-10-day outlook. Forecasts during that time are still cool but not quite as chilly as in the 6-10-day forecast. The chances for excessive dryness during that time will extend from the Central Midwest out into the Eastern Corn Belt and Southern Plains.
Financials
Yesterday’s Wall Street rally (it’s best day since April 2020) on lower inflationary pressures continued overnight as the S&P 500 rose 0.47% to $3,979.50 this morning. Yesterday’s October 2022 CPI reading from the Labor Department found prices only rose 7.7% from the previous year during the month, down 0.5% from the September 2022 inflationary reading.
This is a great sign for the economy – not only does it mean that price hikes are showing signs of easing, but it also could be the market signal the Federal Reserve needs to step back from recent aggressive interest rate hikes.
To be clear, I think it is likely the Fed will continue increasing rates. But with yesterday’s lower inflation news, it means we could see the Fed slow the paces of its rate hikes and offer more clear guidance on when it may begin reversing the rate increases.
And in other great macroeconomic news, China announced overnight that it would reduce COVID-19 quarantine times and some testing requirements for inbound travelers. Quarantine durations for residents who test positive for COVID-19 will now only face an eight-day confinement instead of ten. Airport travelers will only be required to take one COVID test now before boarding.
China is currently facing its largest COVID-19 outbreak across the entire country since late last March. China’s vaccines have been less effective than Western RNA vaccines, leading the country to use the more stringent lockdown methods to try to curb the virus’s transmission.
But as the rest of the world moves into an endemic era and resumes pre-pandemic activity levels, China – and its economy – have largely watched from the sidelines.
“Xi Jinping has, I think, no choice but to make some moderations,” Willy Lam, a political analyst in Hong Kong and a senior fellow at the Jamestown Foundation, told the Wall Street Journal. “This is still a far cry from following Hong Kong’s example, let alone the U.S. and Europe where practically all restrictions have been lifted.”
But it gave the global economy hope this morning that China would – at some point – return to its full buying capacity in the near future if COVID restrictions are eased. Asian markets rallied overnight on the news as optimism grew for demand prospects from the world’s second largest economy.
What else I’m reading this morning on our website, FarmFutures.com:
Read our team’s coverage of the November 2022 WASDE report here.
My latest E-corn-omics column is about the cash market’s impact on futures prices and what could be in store for markets in 2023.
USDA is calling for more corn acreage in 2023 in its latest Baseline Projections to 2023 report.
Virginia Tech ag economist David Kohl helps farmers to navigate adjusting farm debt goals as interest rates rise.
A GAO report on small refinery exemptions was met with fury by the biofuel industry.
Corn, wheat, and money are still playing ball. Bryce Knorr lists three fundamentals to watch to make sure you aren’t missing out on the game.
Morning Ag Commodity Prices – 11/11/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.61
6.535
6.5675
0.035
0.54%
MAR ’23 CORN
$ / BSH
6.6675
6.5925
6.625
0.03
0.45%
MAY ’23 CORN
$ / BSH
6.6675
6.595
6.6275
0.0325
0.49%
JUL ’23 CORN
$ / BSH
6.6225
6.555
6.585
0.0325
0.50%
SEP ’23 CORN
$ / BSH
6.25
6.19
6.2225
0.03
0.48%
DEC ’23 CORN
$ / BSH
6.1325
6.0775
6.105
0.0275
0.45%
AR2 ’24 CORN
$ / BSH
6.2
6.15
6.175
0.03
0.49%
AY2 ’24 CORN
$ / BSH
6.2175
#N/A
6.165
0
0.00%
JUL ’24 CORN
$ / BSH
6.1525
6.1525
6.1525
0.01
0.16%
NOV ’22 SOYBEANS
$ / BSH
14.6225
14.39
14.6025
0.2975
2.08%
JAN ’23 SOYBEANS
$ / BSH
14.5375
14.2425
14.43
0.2
1.41%
MAR ’23 SOYBEANS
$ / BSH
14.595
14.29
14.4825
0.2025
1.42%
MAY ’23 SOYBEANS
$ / BSH
14.6575
14.3525
14.5425
0.2
1.39%
JUL ’23 SOYBEANS
$ / BSH
14.6775
14.3575
14.5625
0.205
1.43%
AUG ’23 SOYBEANS
$ / BSH
14.4925
14.355
14.3925
0.195
1.37%
SEP ’23 SOYBEANS
$ / BSH
14.0575
13.975
13.995
0.1625
1.17%
NOV ’23 SOYBEANS
$ / BSH
13.91
13.645
13.8175
0.1675
1.23%
AN2 ’24 SOYBEANS
$ / BSH
13.885
13.8125
13.835
0.1625
1.19%
AR2 ’24 SOYBEANS
$ / BSH
13.755
13.7475
13.7475
0.1575
1.16%
AY2 ’24 SOYBEANS
$ / BSH
13.7225
13.6875
13.7225
0.17
1.25%
DEC ’22 SOYBEAN OIL
$ / LB
77.5
75.88
77.12
1.03
1.35%
JAN ’23 SOYBEAN OIL
$ / LB
74.98
73.44
74.51
0.88
1.20%
DEC ’22 SOY MEAL
$ / TON
410.6
404.2
407.9
3.8
0.94%
JAN ’23 SOY MEAL
$ / TON
406.8
400.4
404.6
4.2
1.05%
MAR ’23 SOY MEAL
$ / TON
401.7
395.4
400.2
4.9
1.24%
MAY ’23 SOY MEAL
$ / TON
399.5
393.1
398.2
5.4
1.37%
JUL ’23 SOY MEAL
$ / TON
399.1
392.9
398
5.5
1.40%
DEC ’22 Chicago SRW
$ / BSH
8.1475
8.0125
8.0875
0.0525
0.65%
MAR ’23 Chicago SRW
$ / BSH
8.36
8.2375
8.3075
0.05
0.61%
MAY ’23 Chicago SRW
$ / BSH
8.47
8.35
8.4175
0.0475
0.57%
JUL ’23 Chicago SRW
$ / BSH
8.52
8.4075
8.48
0.0475
0.56%
SEP ’23 Chicago SRW
$ / BSH
8.595
8.54
8.56
0.05
0.59%
DEC ’23 Chicago SRW
$ / BSH
8.695
8.585
8.66
0.0475
0.55%
AR2 ’24 Chicago SRW
$ / BSH
8.735
8.6775
8.6875
0.0325
0.38%
DEC ’22 Kansas City HRW
$ / BSH
9.37
9.23
9.3325
0.08
0.86%
MAR ’23 Kansas City HRW
$ / BSH
9.33
9.19
9.2925
0.0775
0.84%
MAY ’23 Kansas City HRW
$ / BSH
9.295
9.1575
9.2575
0.0775
0.84%
JUL ’23 Kansas City HRW
$ / BSH
9.2225
9.09
9.1825
0.07
0.77%
SEP ’23 Kansas City HRW
$ / BSH
9.1925
9.0875
9.1925
0.0925
1.02%
DEC ’23 Kansas City HRW
$ / BSH
9.23
9.135
9.22
0.095
1.04%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.065
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.3975
9.315
9.36
0.045
0.48%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.5275
9.44
9.4925
0.0475
0.50%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.535
9.51
9.535
0.0375
0.39%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.525
9.5
9.525
0.0425
0.45%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.3025
9.3
9.3025
0.0225
0.24%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.3
9.3
9.3
0.0325
0.35%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.2275
0
0.00%
DEC ’21 ICE Dollar Index
$
108.32
106.825
106.945
-1.147
-1.06%
DE ’21 Light Crude
$ / BBL
89.57
86.18
89.31
2.84
3.28%
JA ’21 Light Crude
$ / BBL
88.68
85.36
88.47
2.81
3.28%
DEC ’22 ULS Diesel
$ /U GAL
3.6948
3.5559
3.6815
0.1121
3.14%
JAN ’23 ULS Diesel
$ /U GAL
3.5508
3.4209
3.5392
0.1065
3.10%
DEC ’22 Gasoline
$ /U GAL
2.648
2.5548
2.6297
0.0634
2.47%
JAN ’23 Gasoline
$ /U GAL
2.5815
2.4988
2.5704
0.0618
2.46%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
178.625
0
0.00%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
181.7
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
153.075
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
155.025
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
84.875
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
88.825
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.93
20.93
20.93
-0.03
-0.14%
DEC ’22 Class III Milk
$ / CWT
21.53
21.44
21.44
-0.09
-0.42%
JAN ’23 Class III Milk
$ / CWT
20.8
20.8
20.8
-0.04
-0.19%
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