Morning report: Soybeans take a turn rallying today as hopes for increased Chinese buying paces rise. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-2 cents
Soybeans up 10-17 cents; Soymeal up $0.30/ton; Soyoil up $1.04/lb
Chicago wheat down 6-7 cents; Kansas City wheat down 4-5 cents; Minneapolis wheat down 5-7 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates – last weeks 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
Black Sea
Ships are still leaving Ukrainian ports carrying grain cargoes despite Russia’s accelerated attacks across the country following President Vladimir Putin’s suspension of the Black Sea Grain Initiative announced on Saturday.
In fact, 12 ships sailed from Ukrainian ports yesterday, which was the highest volume seen since the Initiative began in August. Another three cargoes have already left Black Sea ports as of this morning. That optimism took some of the wind out of the sails of the wheat and corn market’s bullish price run yesterday, though the losses barely put a dent in yesterday’s gains.
Corn
Corn prices edged $0.01-$0.02/bushel lower this morning as worries about Black Sea shipping paces following Russia’s suspension of the Black Sea Grains Initiative over the weekend faded. Rapid harvest progress across the Heartland also weighed bearishly on prices this morning.
“Wheat and corn are weakened today on expectations the safe shipping channel for Ukraine’s exports may not be ended but could continue in some form,” Matt Ammermann, StoneX commodity risk manager, told Reuters. “I think markets are giving attention to the statement by Russian President Putin that Russia is suspending but not ending its participation in the safe shipping channel.”
“Meanwhile, ships have continued to sail from Ukraine today with grain shipments despite the Russian move. But the situation is very fluid and there is no clear overview of what is going on.”
USDA updated corn harvest progress in yesterday’s Crop Progress report. Through the week ending October 30, 76% of the U.S. corn crop had been harvested for grain, up 15% from the previous week. This suggests that corn harvest is beginning to wind down across the Heartland thanks to favorable harvest weather conditions over the past week.
The five-year average for the same reporting period stands at 61% (for all states harvesting corn). After a historically delayed start to the 2022 growing season, dry fall weather has allowed for fast harvest speeds this fall and a potentially early end to the 2022 season.
Soybeans
Improving U.S. export shipping paces in the U.S. Gulf and a weaker dollar helped prop up gains in the soybean complex overnight as soybean prices rose $0.09-$0.17/bushel. Bullish support was also gained after trucker protests broke out in Brazil, slowing input flows in the South American country during its peak planting season.
“Soybeans are being strengthened by hopes of more Chinese buying,” Ammermann said. “There is also some attention on the political situation in Brazil with protest roadblocks set up after the presidential election. But it is perhaps too early to talk about any real disruption to Brazil’s soybean exports.”
A trucker protest in Brazil in support of ousted President Jair Bolsonaro following the weekend’s runoff elections mean that soybean flows are at a standstill across the country, which is the world’s largest soybean exporter.
According to Brazilian police, 321 trucker protests in 26 states had either fully or partially shut down road access. Port movement at major terminals Santos and Paranagua was still continuing as normal, but Mato Grosso do Sul – a top cattle and crop producing state – was experiencing some of the highest volumes of road blockades in the country.
Under Bolsonaro, lower diesel costs helped support truckers’ profit margins.
“It’s too soon to say if it’s going to interfere with the flow of production, because the blockades started yesterday,” Normando Corral, president of farm group Famato, told Reuters. “I don’t know how long it will last.”
Soybean harvest is rapidly winding down according to USDA’s Crop Progress report released yesterday. Through this past Sunday, 88% of the crop had been harvested, up 8% from the previous week and 12% ahead of the five-year average for all states for the same reporting period. At this point, there is likely only another week or two left of soybean harvest data to be reported from USDA.
Yesterday’s Export Inspections report from USDA continued to show export volumes struggling at the U.S. Gulf relative to historical paces. Through the week ending October 27, federal officials inspected 94.6 million bushels of soybeans destined for export. That figure is believed to be a 12%-drop from last week’s soybean inspections.
More importantly, marketing year-to-date soybean export inspections continue to trend nearly 10% lower than the same time a year ago amid ongoing low water levels on the Mississippi River that have slowed barge shipping paces to the Gulf this harvest season.
There are some signs of improvement, however. Export inspection data for the month of September 2022 found soybean shipments only totaled 56.3 million bushels at the mouth of the Mississippi River. Data through the most recent October 21-27 reporting week found 40.5 million bushels of soybeans had been inspected on the Mississippi River during that time.
To be sure, October tends to be the higher shipping month for soybean shipping paces, so I’m not exactly comparing apples to apples here. But if you look at this chart of seasonal soybean export inspection volumes on the Mississippi River, you can see that recent rains in the past couple weeks have helped to revive some shipping speed out of the Gulf.
Soybean exports (also all ag commodities, tbh) are also facing headwinds from a stronger dollar, which makes U.S. ag exports more expensive on the global market. With the Federal Reserve’s two-day Federal Open Market (FOMC) meeting kicking off today, don’t be surprised if the dollar continues to rise and limit export potential through the end of the week.
Soybean exports will need the help of calmer global financial markets (to bring down the dollar) and more rains across the Mississippi, Ohio, and Illinois River Valleys to help coax higher export volumes along this fall.
Author’s note: In yesterday’s newsletter I wrote that USDA would be publishing its monthly soy crush data set yesterday. That was a regretful (rookie) error due to too much pre-Halloween candy consumption and sleep imbalance on my part. Ironically, my Halloween costume this year was Wonder Woman. Clearly the universe did not agree with my choice.
USDA will publish the dataset this afternoon. Meanwhile, I’ve made some adjustments to yesterday’s premature preview piece below if you are still interested.
Markets are eagerly awaiting USDA’s first look at September 2022 soy crushing volumes during today’s trading session. Pre-report trade estimates peg today’s total at 167.6 million bushels with a range expected between 165.0 million – 170.5 million bushels.
If the average guess is realized, it would be the smallest monthly crush rate in the past 12 months, which is not necessarily surprising. It would still represent a moderate increase from September 2021 crush rates (164.1M bu.), which indicates robust processing conditions.
Plus, earlier data this month from the National Oilseed Processors Association (NOPA) is a pretty good indicator of how today’s report will shake out. In September 2022, NOPA found the monthly soy crush volume to be 158.1 million bushels, only 3% higher than year ago levels.
The data was released two weeks ago on October 17. However, it was also the smallest monthly soy crush volume recorded since September 2021 as well. This is not unusual – September 2021 soybean crushing volumes were the smallest monthly volumes reported during the 2021/22 marketing year.
Many plants took scheduled downtime for seasonal maintenance and repairs during September. More specifically, the biggest declines were reported at plants in Illinois, Iowa (the top two soybean-producing states in the country), and the South. September is also the time of year where old crop supplies are at their lowest and new crop supplies are only slowly beginning to trickle out of the countryside into end users’ possession.
NOPA reporting is significant because NOPA crush plants handle approximately 95% of all U.S. soybeans destined for crush facilities. The findings of the September 2022 NOPA report were largely neutral (maybe slightly bullish if you need some optimism this morning) with regards to prices. Expect today’s USDA oilseed crushing reports to show similar sentiments.
Wheat
Wheat prices fell $0.04-$0.09/bushel this morning as worries eased about Black Sea shipping paces. Losses were limited by some alarming crop condition news released by USDA yesterday afternoon.
For the first time in the 2023 winter wheat growing season, USDA released winter wheat conditions in yesterday’s Crop Progress report. And the results were quite startling.
USDA reported only 28% of the 2023 winter wheat crop to be in good to excellent condition, which was the lowest rating for the crop since fall winter wheat condition data was first recorded for the Crop Progress report in 1986.
And honestly, it wasn’t even a contest. The next lowest fall condition rating for winter wheat during the same reporting period occurred in 2013 and registered at 40% good to excellent.
Winter wheat planting was 87% complete as of Sunday, up 8% from the previous week and ahead of the five-year average benchmark of 84% for the same reporting period. Emergence saw its biggest gains of the current growing cycle over the past week, rising 13% to 62% as of October 30. Emergence rates continue to lag behind the five-year average at 64% as widespread drought slows crop development.
The U.S. winter wheat crop is not okay, folks. The markets enjoyed a bullish run yesterday on Black Sea supply worries and fell prey to profit-takers during the overnight trading session. But these lackluster crop condition reports mean that yields could face headwinds next summer, especially if the Plains and Midwest do not receive more rain between now and then.
Weather
Warmer temps are forecast across the country today, according to NOAA’s short-term forecasts. Skies are expected to remain clear across the Heartland today, which will pave the way for favorable harvest progress for anyone with crops remaining in the field.
NOAA’s 6-10-day forecasts are now trending warmer for the Midwest and Plains and wetter for the western half of the country (plus Illinois and Wisconsin). Chances for rain are highest in the Pacific Northwest and Upper Midwest, though the Plains could see some moisture relief as well.
Those trends will begin to shift slightly in the 8-10-day outlook. Forecasts during that time are now trending warmer for the Midwest and Plains and wetter for the western half of the country (plus the Upper Midwest and Northern Plains). Chances for rain are highest in the Pacific Northwest and Upper Midwest, though the Central Plains could see some moisture relief as well.
NOAA issued an updated 30-day forecast yesterday and the outlook remains very dry for the Lower Mississippi River Valley. In fact, below average chances for rain for the Ohio River and the border of the Illinois River also mean that the ongoing export woes at the U.S. Gulf are not likely to recede in the upcoming month.
While a high probability for a La Ni?a weather pattern continues to persist over the U.S. this winter, NOAA’s 30-day forecast suggests the variable Polar Jet Stream is currently residing farther north of its typical patterns.
Of course, it isn’t winter yet, so this analyst may be counting her eggs before they hatch (Pun intended. Soybean growers – egg sets are about to increase. IYKYK). But the takeaway is this – the Eastern Corn Belt and Upper Mississippi River Valley will need to see more moisture – and soon – if the shipping issues in the Gulf are to be resolved. La Ni?a winters typically mean dry weather for the Mississippi Delta, so upstream moisture will be critical for shipping success in the coming weeks.
Financials
The Fed’s FOMC meeting starts today – expect a 0.75% interest rate increase tomorrow. S&P 500 futures soared 0.93% higher to $3,919.25 as markets eagerly awaited Q3 earnings reports today.
What else I’m reading this morning on our website, FarmFutures.com:
Our latest special edition Farm Futures print issue features a series on farmer mental health. It is one of the pieces I am most proud of during my time here, so I cannot recommend checking it out enough.
Commstock Investment’s Matthew Kruse reports that planting season is in full swing in Brazil.
Roger Wright explains how to interpret today’s Export Inspections report from USDA.
Another rail strike threatens the ag industry at a time when barge and trucking companies are already stretched thin.
Naomi Blohm’s technical analysis shows soybeans could still rise $2.50/bushel but fundamental forces will likely be the key driver of higher – or lower – soybean prices.
Virginia Tech ag economist David Kohl cautions growers to be aware of global financial and economic instability in the coming months.
Morning Ag Commodity Prices – 11/1/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.94
6.8725
6.9025
-0.0125
-0.18%
MAR ’23 CORN
$ / BSH
6.985
6.925
6.95
-0.0175
-0.25%
MAY ’23 CORN
$ / BSH
6.97
6.915
6.94
-0.0175
-0.25%
JUL ’23 CORN
$ / BSH
6.905
6.85
6.8725
-0.02
-0.29%
SEP ’23 CORN
$ / BSH
6.405
6.375
6.3875
-0.0125
-0.20%
DEC ’23 CORN
$ / BSH
6.2725
6.23
6.2425
-0.015
-0.24%
AR2 ’24 CORN
$ / BSH
6.34
6.315
6.315
-0.0075
-0.12%
AY2 ’24 CORN
$ / BSH
6.3575
#N/A
6.3425
0
0.00%
JUL ’24 CORN
$ / BSH
6.3025
6.29
6.3025
-0.0025
-0.04%
NOV ’22 SOYBEANS
$ / BSH
14.24
14.0375
14.2375
0.1675
1.19%
JAN ’23 SOYBEANS
$ / BSH
14.3675
14.1425
14.3625
0.1675
1.18%
MAR ’23 SOYBEANS
$ / BSH
14.445
14.2225
14.435
0.16
1.12%
MAY ’23 SOYBEANS
$ / BSH
14.515
14.2975
14.5025
0.155
1.08%
JUL ’23 SOYBEANS
$ / BSH
14.55
14.3325
14.5275
0.145
1.01%
AUG ’23 SOYBEANS
$ / BSH
14.3775
14.18
14.3675
0.145
1.02%
SEP ’23 SOYBEANS
$ / BSH
14.02
13.915
14.0075
0.13
0.94%
NOV ’23 SOYBEANS
$ / BSH
13.86
13.6975
13.8475
0.1125
0.82%
AN2 ’24 SOYBEANS
$ / BSH
13.865
13.8025
13.865
0.0975
0.71%
AR2 ’24 SOYBEANS
$ / BSH
13.8
#N/A
13.71
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.72
13.72
13.72
0.0275
0.20%
DEC ’22 SOYBEAN OIL
$ / LB
74.24
72.95
74.22
1.01
1.38%
JAN ’23 SOYBEAN OIL
$ / LB
71.58
70.38
71.56
0.95
1.35%
DEC ’22 SOY MEAL
$ / TON
431
425.8
430
1.9
0.44%
JAN ’23 SOY MEAL
$ / TON
421.8
416.9
421.2
2.1
0.50%
MAR ’23 SOY MEAL
$ / TON
411.9
407.4
411.1
1.8
0.44%
MAY ’23 SOY MEAL
$ / TON
406.5
402.5
405.4
1.2
0.30%
JUL ’23 SOY MEAL
$ / TON
405.1
401.6
404.2
1.2
0.30%
DEC ’22 Chicago SRW
$ / BSH
8.845
8.6775
8.765
-0.0575
-0.65%
MAR ’23 Chicago SRW
$ / BSH
9.02
8.86
8.94
-0.0525
-0.58%
MAY ’23 Chicago SRW
$ / BSH
9.105
8.9475
9.025
-0.05
-0.55%
JUL ’23 Chicago SRW
$ / BSH
9.075
8.9325
8.9825
-0.055
-0.61%
SEP ’23 Chicago SRW
$ / BSH
9.105
8.97
9.015
-0.05
-0.55%
DEC ’23 Chicago SRW
$ / BSH
9.1525
9.025
9.0775
-0.05
-0.55%
AR2 ’24 Chicago SRW
$ / BSH
9.1425
9.0175
9.0175
-0.0925
-1.02%
DEC ’22 Kansas City HRW
$ / BSH
9.82
9.6675
9.7475
-0.04
-0.41%
MAR ’23 Kansas City HRW
$ / BSH
9.78
9.6325
9.7075
-0.035
-0.36%
MAY ’23 Kansas City HRW
$ / BSH
9.7475
9.6175
9.6775
-0.035
-0.36%
JUL ’23 Kansas City HRW
$ / BSH
9.65
9.5175
9.5975
-0.0225
-0.23%
SEP ’23 Kansas City HRW
$ / BSH
9.63
9.5125
9.525
-0.07
-0.73%
DEC ’23 Kansas City HRW
$ / BSH
9.65
9.56
9.56
-0.0625
-0.65%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.5175
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.81
9.6725
9.715
-0.0975
-0.99%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.9
9.8
9.8025
-0.095
-0.96%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.9425
9.8575
9.8575
-0.09
-0.90%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.84
9.835
9.835
-0.07
-0.71%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.58
9.52
9.58
-0.005
-0.05%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.54
9.54
9.54
-0.035
-0.37%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.5675
0
0.00%
DEC ’21 ICE Dollar Index
$
111.46
110.67
110.785
-0.635
-0.57%
DE ’21 Light Crude
$ / BBL
88.24
85.92
87.82
1.29
1.49%
JA ’21 Light Crude
$ / BBL
87.12
84.85
86.73
1.33
1.56%
DEC ’22 ULS Diesel
$ /U GAL
3.7728
3.6732
3.6909
0.0168
0.46%
JAN ’23 ULS Diesel
$ /U GAL
3.5777
3.4939
3.5125
0.012
0.34%
DEC ’22 Gasoline
$ /U GAL
2.5763
2.5093
2.5644
0.0387
1.53%
JAN ’23 Gasoline
$ /U GAL
2.5065
2.4405
2.4972
0.0383
1.56%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
177.625
0
0.00%
JAN ’23 Feeder Cattle
$ / CWT
0
#N/A
179.45
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
152.475
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
155.825
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
84.925
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
88.45
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.81
#N/A
21.81
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.54
20.4
20.47
0
0.00%
DEC ’22 Class III Milk
$ / CWT
19.06
18.8
19.06
0.06
0.32%
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