Morning report: Prevent plant acres reflect delayed corn planting season in 2022. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 6-15 cents
Soybeans up 6-15 cents; Soymeal up $3.9/ton; Soyoil up $0.22/lb
Chicago wheat up 6-7 cents; Kansas City wheat up 8-11 cents; Minneapolis wheat up 5-7 cents
*Prices as of 7:00am CDT.
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Prevent Plant Acreage released
USDA’s Farm Service Agency (FSA) released the first look at 2022 Prevent Plant acres yesterday. The FSA was originally supposed to release the data in tandem with the August 2022 WASDE reports a week and a half ago, but the agency needed more time to review the data.
In the context of 2022, the report did not show anything farmers were not already aware of before its release. Combined prevent plant acres for corn (3.15M ac.), soybeans (987,231 ac.), and wheat (1.16M ac.) totaled 5.30 million acres, four times last year’s acreage of 1.27 million acres for all three crops.
But the total volumes still trailed 2020’s showing of 8.94 million acres and the 2019 record of 18.11 million acres for the three crops.
Unsurprisingly, corn acres saw the largest volume of prevent plant acre claims thanks to a cool and wet start to the season across much of the Heartland, but especially in the Upper Midwest. The planting delays were directly reflected in state level data, which saw North Dakota claim the largest share of prevent plant acreage in 2022 with a total of 2.31 acres.
South Dakota (731K ac.), Minnesota (492K ac.), Arkansas (317K ac.), and Colorado (198K ac.) rounded out the top five states for combined corn, soybean, and wheat prevent plant acres. Interestingly, Illinois’s prevent plant acreage filings for wheat propelled it to number 9 on the list, after reporting the country’s third largest prevent plant wheat acreage in 2022.
At this point, the data confirms the lingering “woulda, coulda, shoulda” thoughts that have been running through farmers’ minds since the slow planting season this spring. What the data does not account for is the competitive commodity environment that still offered farmers the prospect of profits this year in the form of alternative crops, even if one of the three primary crop rotations fell out of reach this spring.
And it could suggest potential opportunities for next year. Wheat prices remain profitable, so will they provide more competition against corn and soybean acres in Illinois next year? And will corn prices be profitable enough against other alternatives to buy back acreage in North and South Dakota in 2023? Time will tell, but the wild ride for commodities is clearly not ready to end any time soon.
Corn
Crop tours focused on the Western Corn Belt yesterday, which (unsurprisingly) found extensive crop damage due to drought, wind, and hail. The news – paired with steeper than expected ratings cuts from USDA yesterday – lifted corn futures prices $0.06-$0.15/bushel overnight, lifting prices for the 2023 crop above the $6/bushel benchmark.
“Even if it would rain now, it would do no good [for the corn] in South Dakota,” Emily Carolan, territory manager with Pioneer Seeds and a tour participant, told Reuters yesterday. “The stress on this crop has been all season.”
USDA’s weekly Crop Progress report saw corn conditions take a larger than expected hit yesterday. Through the week ending August 21, 55% of the U.S. corn crop was rated in good to excellent condition, a 2% drop from the previous week.
Market analysts had been expecting ratings to stay consistent with last week’ reading of 57% good to excellent in yesterday’s report thanks to more moderate temperatures across the Heartland last week, as well as another round of timely rains in the Upper Midwest during the latter half of last week. So, the larger than expected cut ushered in some bullish sentiments to the corn market this morning.
With silking progress updates largely finished for the season, USDA will turn its focus to maturation speeds for corn. USDA’s first week of reporting on maturation progress found 4% of the crop has reached maturation, in line with last year’s paces at this time.
As of Sunday, 31% of the crop had reached the denting phase, up 15% from the previous week and barely a point ahead of the five-year average. During that time, doughing progress was found to be 75% complete, also aligned with the five-year average. Last week’s cooler temperatures and showers likely played a significant role in helping these metrics catch up to the five-year averages, which have largely lingered behind historical paces due to the delayed planting season earlier this spring.
Soybeans
Soybean prices only edged out a $0.06-$0.15/bushel gain this morning as worries about dry weather in the Upper Midwest this week ushered in yield shortfall concerns. Crop tour findings and a rally in the oil market also kept price gains alive in the soybean market.
“The market has focussed on reports coming from scouts in the western Midwest,” Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, told Reuters overnight. “Crop problems are suspected of being greatest in that region, and the reports coming back so far (are) mostly bad.”
Soybean condition ratings took a 1% hit in yesterday’s Crop Progress report. Similar to corn, the move surprised market watchers, who had been expecting ratings to stay steady at last week’s reading of 58% good to excellent. The drop to 57% good to excellent through the week ending August 21 helped support this morning’s price gains in the soybean futures market.
As of Sunday, 84% of the crop has set pods, up 10% from the previous week and just a fraction above the five-year average for the same reporting period. Similar to corn, with most of the soybean crop reaching its peak reproductive phases, USDA will soon begin to turn its focus to maturation progress readings for the U.S. soybean crop in coming weeks.
Wheat
Wheat prices rose $0.05-$0.13/bushel overnight on slow Russian and Ukrainian shipping paces as well as continued supply pressure from wheat production shortfalls in the European Union this summer. It marked the third trading session in which wheat has produced gains following a price drop to a six-month low late last week.
Spring wheat conditions were about the only pre-report analyst guess that came in on the money in yesterday’s Crop Progress report. Analysts predicted that USDA would leave the August 21 rating unchanged from the previous week at 64% good to excellent thanks to a week of cooler temperatures and timely rains in the Northern Plains and on this item, they were right.
Spring wheat harvest continues to gain momentum across the Northern U.S. border, with 33% of the crop harvested as of Sunday, up 17% from the previous week. Harvest progress will likely continue to be delayed by spring planting delays in North Dakota and Minnesota, as the prior five-year average for harvesting stands at 48% complete for this time of year.
USDA reported that 95% of the 2022 U.S. winter wheat crop had been harvested as of Sunday. While that value was 5% higher than the previous week, it was 1% lower than what pre-report analyst estimates had forecasted. Poor weather in the Pacific Northwest last week likely stalled the weekly reading, as hail and wind events kept farmers in the region from advancing on white wheat harvest.
Weather
Temperatures across the Heartland are likely to trend warmer today relative to last week’s moderate mercury readings, according to NOAA’s short-range forecasts. The Plains will see temperatures rise into the 90s-100s while the Mississippi River Valley and the area east of it is more likely to experience temperatures in the 80s-90s today.
Clear skies are ahead for the Heartland today, though the Northern Plains should see a chance of showers late this evening into early tomorrow morning. Showers are going to continue to line the Southern Plains and Southeast over the next couple days, which should help the region combat excessive heat during that time.
Above average heat is beginning to move out of the Corn Belt in the 8-14 day NOAA outlook. Dry conditions will likely persist in the Upper Midwest during that time, though the Southern Plains and Eastern Corn Belt could have a good chance at showers.
The 6-10-day NOAA outlook forecasts the last heat wave of the summer for the Northern Plains and Upper Midwest through the end of August. Chances for showers for the Central and Southern Plains and Eastern Corn Belt are above average during that time, which bodes favorably for winter wheat seeding.
Financials
Bargain buyers lifted Wall Street indices slightly overnight, pushing the S&P 500 up 0.15% to $4,147.50 at last glance this morning. Futures tumbled drastically lower yesterday as recession fears crept back into the market as the Federal Reserve kicks off its annual outlook meeting at Jackson Hole.
“The euphoria has really fizzled out for equities,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown in London, told the Wall Street Journal. “The clamor of voices has become louder from central bank policy makers saying, ‘Hold on, we aren’t out of the woods yet.'”
“Inflation is still a real challenge, and the Fed has to be extremely vigilant and keep monetary policy tight.”
Potential OPEC production cuts suggested by Saudi Arabia overnight lifted oil prices.
What else I’m reading this morning on our website, FarmFutures.com:
USDA is providing $300 million for current or transitioning organic farmers through a multi-agency partnership.
Are call options a money pit or a profit protector? Bryce Knorr investigates.
My latest E-corn-omics column explains why soybean exports are looking so much better than corn exports in the upcoming 2022/23 marketing year.
Commstock’s Matthew Kruse previews Brazilian soybean planting, noting that another La Ni?a cycle and low fertility could pose yield risks for what is forecasted to be another record-breaking Brazilian soybean crop.
Harvest prep is underway in Indiana, reports Between the Fencerows columnist and Indiana farmer Kyle Stackhouse.
AgMarket.Net’s Bill Biedermann weighs the chances of another bullish run in the corn market.
My recent E-corn-omics column highlights wheat export optimism.
Morning Ag Commodity Prices – 8/23/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.5175
6.3575
6.4875
0.1525
2.41%
DEC ’22 CORN
$ / BSH
6.475
6.3125
6.4375
0.1475
2.34%
MAR ’23 CORN
$ / BSH
6.535
6.385
6.5
0.1375
2.16%
MAY ’23 CORN
$ / BSH
6.55
6.41
6.52
0.1325
2.07%
JUL ’23 CORN
$ / BSH
6.5175
6.38
6.495
0.1375
2.16%
SEP ’23 CORN
$ / BSH
6.145
6.0625
6.13
0.0825
1.36%
DEC ’23 CORN
$ / BSH
6.06
5.985
6.0375
0.065
1.09%
AR2 ’24 CORN
$ / BSH
6.13
6.065
6.13
0.0825
1.36%
MAY ’24 CORN
$ / BSH
6.165
6.165
6.165
0.0825
1.36%
SEP ’22 SOYBEANS
$ / BSH
15.5
15.2825
15.41
0.14
0.92%
NOV ’22 SOYBEANS
$ / BSH
14.5525
14.3125
14.4275
0.075
0.52%
JAN ’23 SOYBEANS
$ / BSH
14.6125
14.38
14.4825
0.0625
0.43%
MAR ’23 SOYBEANS
$ / BSH
14.635
14.405
14.51
0.06
0.42%
MAY ’23 SOYBEANS
$ / BSH
14.645
14.43
14.525
0.055
0.38%
JUL ’23 SOYBEANS
$ / BSH
14.63
14.42
14.5125
0.0525
0.36%
AUG ’23 SOYBEANS
$ / BSH
14.3775
14.3775
14.3775
0.1075
0.75%
SEP ’23 SOYBEANS
$ / BSH
13.9825
#N/A
13.865
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.8725
13.685
13.75
0.04
0.29%
AN2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.7425
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.6625
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
69.45
68.14
69.02
0.25
0.36%
OCT ’22 SOYBEAN OIL
$ / LB
67.66
66.34
67.2
0.18
0.27%
SEP ’22 SOY MEAL
$ / TON
467.5
460
463
2.5
0.54%
OCT ’22 SOY MEAL
$ / TON
428.2
420.8
423.2
2.4
0.57%
DEC ’22 SOY MEAL
$ / TON
423.4
415.4
418.4
3
0.72%
JAN ’23 SOY MEAL
$ / TON
418.8
410.9
414.1
3.3
0.80%
MAR ’23 SOY MEAL
$ / TON
410.3
402.9
406.9
4.3
1.07%
SEP ’22 Chicago SRW
$ / BSH
7.8825
7.6725
7.8
0.095
1.23%
DEC ’22 Chicago SRW
$ / BSH
8.055
7.85
7.9675
0.085
1.08%
MAR ’23 Chicago SRW
$ / BSH
8.215
8.015
8.13
0.0825
1.03%
MAY ’23 Chicago SRW
$ / BSH
8.3175
8.125
8.23
0.08
0.98%
JUL ’23 Chicago SRW
$ / BSH
8.325
8.1375
8.2525
0.0875
1.07%
SEP ’23 Chicago SRW
$ / BSH
8.3675
8.2175
8.2925
0.075
0.91%
DEC ’23 Chicago SRW
$ / BSH
8.4325
8.315
8.3625
0.0675
0.81%
SEP ’22 Kansas City HRW
$ / BSH
8.84
8.625
8.755
0.1025
1.18%
DEC ’22 Kansas City HRW
$ / BSH
8.85
8.6275
8.745
0.085
0.98%
MAR ’23 Kansas City HRW
$ / BSH
8.84
8.625
8.7425
0.075
0.87%
MAY ’23 Kansas City HRW
$ / BSH
8.8225
8.6575
8.73
0.0675
0.78%
JUL ’23 Kansas City HRW
$ / BSH
8.7225
8.6175
8.655
0.075
0.87%
SEP ’23 Kansas City HRW
$ / BSH
8.665
8.6125
8.645
0.08
0.93%
DEC ’23 Kansas City HRW
$ / BSH
8.71
8.7
8.71
0.1075
1.25%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.0425
8.845
8.985
0.1
1.13%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.1625
8.965
9.1025
0.0975
1.08%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.275
9.115
9.235
0.105
1.15%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.355
9.2675
9.3425
0.1325
1.44%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.3825
#N/A
9.2375
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.14
9.09
9.14
0.0975
1.08%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.21
9.1575
9.21
0.095
1.04%
SEP ’21 ICE Dollar Index
$
109.205
108.775
108.925
-0.056
-0.05%
OC ’21 Light Crude
$ / BBL
92.19
90.42
91.82
1.46
1.62%
NO ’21 Light Crude
$ / BBL
91.69
90.1
91.37
1.4
1.56%
SEP ’22 ULS Diesel
$ /U GAL
3.8417
3.7551
3.7913
0.0151
0.40%
OCT ’22 ULS Diesel
$ /U GAL
3.8055
3.7192
3.7521
0.0137
0.37%
SEP ’22 Gasoline
$ /U GAL
2.9382
2.8797
2.8822
-0.009
-0.31%
OCT ’22 Gasoline
$ /U GAL
2.7376
2.6758
2.6867
0.0045
0.17%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
181.4
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
184.35
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
141.225
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
144.5
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
93.975
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
84.475
0
0.00%
AUG ’22 Class III Milk
$ / CWT
20.07
#N/A
20.09
0
0.00%
SEP ’22 Class III Milk
$ / CWT
20.13
20.13
20.13
0.17
0.85%
OCT ’22 Class III Milk
$ / CWT
20.5
20.35
20.35
0.26
1.29%
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