Morning report: Wheat stages a comeback following a two-month low set yesterday. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 3-4 cents
Soybeans down 3-9 cents, Soymeal down $6.40/ton, Soyoil up $0.25/lb
Chicago wheat up 2 cents, Kansas City wheat up 1 cent, Minneapolis wheat up 2 cents
*Prices as of 7:00am CST.
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 MyMap, so farmers can see others’ responses from across the country – or even across the county!
My latest FFTF column is live on our site! Soybean harvest is rapidly coming to a close across the country and more and more FFTF respondents are reporting corn harvest as complete.
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 upcoming weeks. 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 columns as harvest season winds down. Thanks! -JH
Good morning! I hope you’re recovering from yesterday’s WASDE report better than the soybean market this morning. Going into the report, we knew that corn and soybean yields – as well as global wheat production estimates – were likely going to be the focus of yesterday’s report. And in that regard, USDA did not disappoint.
I’ll sprinkle in my insights from yesterday’s report throughout this morning’s newsletter. If you want to read our full coverage and analysis, check out our November 2022 WASDE report here.
Corn
Corn prices fell $0.02-$0.04/bushel this morning as the market digested higher U.S. ending stocks from higher 2022 corn yields in yesterday’s USDA reports. Worries about export prospects amid a stronger dollar this morning and ongoing concerns about dealings with Mexico also weighed corn futures lower this morning.
Mexico implemented a ban on U.S. yellow corn that has been genetically modified and comments from Mexican President Andres Manuel Lopez Obrador yesterday cast further doubt on a resolution to this situation that would result favorably for U.S. corn producers.
Lopez Obrador told reporters yesterday that the Mexican government turned down an offer from the U.S. to sell Mexico GM corn, noting that “There is a market for it, but the government cannot make a purchase because we do not want GM.”
To be clear, Mexico’s corn ban has little to no scientific evidence to support it. It seems to be a political move that would benefit other countries who produce GM corn, including Ukraine. Lopez Obrador campaigned on helping Mexico to become completely self-sufficient for its food production.
Nov22 WASDE: Corn yields rise, but not as significantly as soybeans
USDA-NASS’s corn estimate rose 2% from October estimates to land at 172.3 bpa.
Biggest gains were from Illinois (record-setting 215 bpa) and to a lesser extent Iowa and Indiana.
But corn prices were spared the price bloodshed endured by soybeans as that range was comfortably within market expectations.
Old crop prices turned into the green while new crop prices waned.
The 2022 U.S. corn crop will be 13.93 billion bushels – seventh largest on record.
The yield of 172.3 bpa is the fifth largest U.S. corn yield on record.
Analyst comments: The 2022 U.S. corn and soybean crops are slightly bigger than the previous month’s estimates, but we can’t ignore that even the slight yield increases are well below trendline estimates and will keep some supply tightness in the markets that appear to have a stabilizing impact on prices – for now.
Nov22 WASDE: Lower global corn output
European Union (specifically Hungary) and South Africa reporting lower corn crops and exports
Nigeria and South Africa to scale back usage rates, though Vietnam could present export opportunities for U.S. corn exporters in the coming year
Global corn ending stocks were revised 17 million bushels lower to 11.84 billion bushels on the production shortfalls.
Analyst comments: The optimism for exports to Vietnam only holds if the dollar does not render U.S. corn unaffordable next spring and if a supposed global recession does not restrict Vietnam’s purchasing power in the coming year.
Old crop corn prices derived some bullish strength today from the tight global supply outlook for corn. USDA did not make any significant changes to South American corn estimates, suggesting that spring weather in the region is allowing for corn sowing to progress favorably.
But that is a key reason why new crop corn prices exhibited some weakness – if Brazil and Argentina are both able to harvest sizeable corn crops, that would go a long way in alleviating some of the supply tightness in the corn market, which would invariably be bearish for U.S. corn prices.
Soybeans
Nov22 WASDE: Soybeans revert to bearish ways
Soybean futures pared some of the morning’s price gains after USDA’s National Agricultural Statistics Service (NASS) found higher 2022 harvested yields (50.2 bushels per acre) than markets had been expecting prior to the report’s release (49.8 bpa).
Old crop prices posted gains while new crop prices edged lower.
Better than expected yields in Iowa and Missouri were the primary driver for the higher yield figure.
At 4.346 billion bushels, the 2022 crop will be the fourth largest on record.
Yield of 50.2 bpa is the fifth largest on record.
Nov22 WASDE: Argentina’s drought woes keep bullish hopes alive for soybeans
USDA cut 55 million bushels from Argentina’s soybean production estimates for 2022/23, leaving it at 1.87 billion bushels.
Argentina is the world’s third largest soybean exporter and the world’s top soymeal exporter.
USDA increased old crop (2021/22) soybean imports into China by 58 million bushels for a total of 3.36 billion bushels. New crop soybean imports to China were unchanged from last month but higher than its old crop counterpart at 3.60 billion bushels.
Analyst comments: USDA’s increases to 2022/23 global soybean ending stocks were largely derived from growing old crop stocks in China in this month’s WASDE report. The E.U. also imported more soybeans than previously realized in 2021/22, which was another contributing factor to larger 2022/23 ending stocks, despite the cuts to Argentina’s production.
Old crop soybean price increases likely reflected the drought situation in Argentina. But new crop prices fell based on dynamics in the larger global edible oils market – an uptick in winter rapeseed sowing in the Northern Hemisphere this fall will likely offset potential losses this fall for Northern Hemisphere soybean, sunflower, and cottonseed crops.
Lower global corn output
European Union (specifically Hungary) and South Africa reporting lower corn crops and exports
Nigeria and South Africa to scale back usage rates, though Vietnam could present export opportunities for U.S. corn exporters in the coming year
Global corn ending stocks were revised 17 million bushels lower to 11.84 billion bushels on the production shortfalls.
Analyst comments: The optimism for exports to Vietnam only holds if the dollar does not render U.S. corn unaffordable next spring and if a supposed global recession does not restrict Vietnam’s purchasing power in the coming year.
Old crop corn prices derived some bullish strength today from the tight global supply outlook for corn. USDA did not make any significant changes to South American corn estimates, suggesting that spring weather in the region is allowing for corn sowing to progress favorably.
But that is a key reason why new crop corn prices exhibited some weakness – if Brazil and Argentina are both able to harvest sizeable corn crops, that would go a long way in alleviating some of the supply tightness in the corn market, which would invariably be bearish for U.S. corn prices.
Wheat
Wheat prices bounced back from a six-month low overnight to notch a $0.01-$0.02/bushel gain. But the optimism was likely limited after yesterday’s USDA reports forecasted higher global wheat supplies that could help alleviate some of the supply pressures at play in the market.
Nov22 WASDE: A bearish report for wheat
WAOB found 5 million additional bushels of 2021/22 ending stocks due to lower exports, which increased beginning stocks for the 2022/23 marketing year.
But an uptick in human food consumption (mmm cookies and pasta) tightened domestic supplies fractionally.
Global stocks grow on increased production forecasts for Australia, Brazil, Kazakhstan, and the United Kingdom.
These gains are likely to offset losses this past summer in the E.U. and anticipated losses to the Argentine wheat crop, both due to drought.
Analyst comments: This report could have been much worse for U.S. wheat supplies. While U.S. supplies tightened slightly from the previous month, global stocks increased on anticipated production gains from several other key players in the global wheat market.
One item that I found interesting in today’s report was the USDA expects food consumption of wheat in Indonesia and Bangladesh to be scaled back, which slowed global wheat food usage rates. This is another factor worth watching in the coming months – if a recession erodes the buying power of Southeast Asian countries, the world’s top exporters could endure smaller export volumes as a result.
On a brighter note, global wheat usage for livestock feed was revised higher this month thanks to high meat prices and increased consumption from the E.U., South Korea, the Philippines, and Vietnam.
The U.S. wheat market is likely to remain quiet until 2023 winter wheat sowings are reported in January 2023. Until that point, domestic pricing is likely to be dependent upon global dynamics.
Speaking of that, I noticed that USDA left Russia and Ukraine’s wheat production and export volumes unchanged. It wasn’t surprising considering the ongoing uncertainty surrounding the future of the “Black Sea Grain Initiative.”
But to that end, I predict that wheat prices will continue to fluctuate with each new news report that comes out of Russia and Ukraine with regards to the grain deal. I’m guessing any significant price changes will be rapid if recent history has been any indicator.
Weather
A band of showers is likely to stretch from the Southern Plains to the Upper Midwest, according to NOAA’s short-term forecasts. Accumulation in the region could reach up to an inch between Eastern Oklahoma and Northwestern Illinois but will be lighter in the surrounding areas.
A wintery mix system is headed for North Dakota today, which could drop up to an inch or more of mixed precipitation.
Hurricane Nicole made landfall on Florida’s Atlantic Coast overnight. The system could bring some unexpected showers to the far Eastern Corn Belt over the weekend as the storm continues to move north up the Atlantic Coast.
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
Inflation is the name of the game for the markets this morning. The latest Consumer Price Index (CPI) update for October 2022 will be released this morning and the S&P 500 is trading 0.16% higher to $3,762.00 on hopes that hot prices will show some signs of cooling in response to Federal Reserve interest rate hikes.
The September 2022 CPI reading saw inflation rise 8.2% from a year ago. The August 2022 figure was 8.3%. These inflation rates are all substantially lower than the 40-year high of 9.1% recorded in June 2022.
In today’s report, economists expect the Labor Department’s inflationary metric will come in at 7.9%. Markets are hoping that inflation will finally show signs of easing which would bring some relief to the increasingly cash-strapped working class.
“Early on, goods prices that were driving that increase but more recently it’s services prices, and that likely reflects the very tight labor market,” Brett Ryan, senior economist at Deutsche Bank told the Wall Street Journal yesterday.
What else I’m reading this morning on our website, FarmFutures.com:
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 – 11/10/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.6725
6.61
6.6175
-0.0275
-0.41%
MAR ’23 CORN
$ / BSH
6.73
6.67
6.68
-0.025
-0.37%
MAY ’23 CORN
$ / BSH
6.725
6.6675
6.675
-0.03
-0.45%
JUL ’23 CORN
$ / BSH
6.6775
6.6175
6.6275
-0.0325
-0.49%
SEP ’23 CORN
$ / BSH
6.275
6.225
6.2325
-0.035
-0.56%
DEC ’23 CORN
$ / BSH
6.1575
6.105
6.11
-0.0325
-0.53%
AR2 ’24 CORN
$ / BSH
6.22
6.21
6.2175
0.005
0.08%
AY2 ’24 CORN
$ / BSH
6.2
6.2
6.2
-0.035
-0.56%
JUL ’24 CORN
$ / BSH
6.21
#N/A
6.205
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
14.65
14.59
14.62
0.0225
0.15%
JAN ’23 SOYBEANS
$ / BSH
14.5925
14.4325
14.475
-0.045
-0.31%
MAR ’23 SOYBEANS
$ / BSH
14.64
14.47
14.51
-0.0625
-0.43%
MAY ’23 SOYBEANS
$ / BSH
14.7025
14.53
14.57
-0.0675
-0.46%
JUL ’23 SOYBEANS
$ / BSH
14.7075
14.54
14.5725
-0.075
-0.51%
AUG ’23 SOYBEANS
$ / BSH
14.4725
14.355
14.385
-0.07
-0.48%
SEP ’23 SOYBEANS
$ / BSH
14.0625
13.9625
13.98
-0.08
-0.57%
NOV ’23 SOYBEANS
$ / BSH
13.9075
13.7625
13.805
-0.06
-0.43%
AN2 ’24 SOYBEANS
$ / BSH
13.9175
13.7875
13.825
-0.0575
-0.41%
AR2 ’24 SOYBEANS
$ / BSH
13.81
#N/A
13.7975
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.75
13.75
13.75
-0.0075
-0.05%
DEC ’22 SOYBEAN OIL
$ / LB
76.25
75.4
75.73
0.19
0.25%
JAN ’23 SOYBEAN OIL
$ / LB
73.8
72.96
73.27
0.09
0.12%
DEC ’22 SOY MEAL
$ / TON
420.4
411.6
412.4
-5.2
-1.25%
JAN ’23 SOY MEAL
$ / TON
415.2
407
407.7
-4.6
-1.12%
MAR ’23 SOY MEAL
$ / TON
408.2
401.1
401.7
-3.9
-0.96%
MAY ’23 SOY MEAL
$ / TON
404.3
397.9
398.1
-3.9
-0.97%
JUL ’23 SOY MEAL
$ / TON
403
396.9
397.6
-3.3
-0.82%
DEC ’22 Chicago SRW
$ / BSH
8.14
8.0275
8.075
0.01
0.12%
MAR ’23 Chicago SRW
$ / BSH
8.3575
8.25
8.2975
0.02
0.24%
MAY ’23 Chicago SRW
$ / BSH
8.47
8.37
8.4175
0.025
0.30%
JUL ’23 Chicago SRW
$ / BSH
8.52
8.425
8.47
0.0225
0.27%
SEP ’23 Chicago SRW
$ / BSH
8.595
8.5
8.5375
0.0125
0.15%
DEC ’23 Chicago SRW
$ / BSH
8.6925
8.5975
8.645
0.0275
0.32%
AR2 ’24 Chicago SRW
$ / BSH
8.685
8.6225
8.6675
0.0225
0.26%
DEC ’22 Kansas City HRW
$ / BSH
9.3525
9.27
9.305
0.005
0.05%
MAR ’23 Kansas City HRW
$ / BSH
9.3175
9.24
9.27
0.0025
0.03%
MAY ’23 Kansas City HRW
$ / BSH
9.28
9.2025
9.235
0.0025
0.03%
JUL ’23 Kansas City HRW
$ / BSH
9.215
9.14
9.1475
-0.0225
-0.25%
SEP ’23 Kansas City HRW
$ / BSH
9.1525
9.1275
9.1425
-0.0075
-0.08%
DEC ’23 Kansas City HRW
$ / BSH
9.16
9.15
9.15
-0.03
-0.33%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.1225
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.4475
9.375
9.395
0.0125
0.13%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.5425
9.5
9.5225
0.015
0.16%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.6075
9.575
9.5875
0.02
0.21%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.6025
9.55
9.55
-0.015
-0.16%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.35
9.3125
9.3125
-0.035
-0.37%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.33
#N/A
9.34
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.3025
0
0.00%
DEC ’21 ICE Dollar Index
$
110.89
110.015
110.77
0.31
0.28%
DE ’21 Light Crude
$ / BBL
85.98
84.7
85.31
-0.52
-0.61%
JA ’21 Light Crude
$ / BBL
85.14
83.9
84.47
-0.53
-0.62%
DEC ’22 ULS Diesel
$ /U GAL
3.6545
3.5881
3.6172
-0.0391
-1.07%
JAN ’23 ULS Diesel
$ /U GAL
3.4826
3.4301
3.4529
-0.0384
-1.10%
DEC ’22 Gasoline
$ /U GAL
2.5672
2.5284
2.5582
0.0136
0.53%
JAN ’23 Gasoline
$ /U GAL
2.4985
2.4598
2.4824
0.0059
0.24%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
177.725
0
0.00%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
179.65
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
151.575
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
154.15
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
85.275
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
89.15
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.88
20.88
20.88
-0.12
-0.57%
DEC ’22 Class III Milk
$ / CWT
21.51
21.46
21.51
-0.07
-0.32%
JAN ’23 Class III Milk
$ / CWT
20.48
#N/A
20.68
0
0.00%
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