Afternoon report: Corn also spills lower, while soybeans stay slightly firm on Wednesday
Grain prices were mixed but mostly lower after Russia agreed to honor a prior promise to allow safe passage of Ukrainian ships in the Black Sea, which it had rejected over the weekend. That left wheat prices down substantially, with some contracts falling more than 6%. Corn prices also faced double-digit losses today. Soybeans didn’t follow suit, picking up modest gains after export optimism triggered another round of technical buying.
Loads of rain is likely in a band stretching from Louisiana up through Wisconsin – large parts of the affected states will gather another 1.5″ to 2″ or more between Thursday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry weather returning to the eastern Corn Belt between November 9 and November 15, with cooler-than-normal conditions for the Plains and upper Midwest during that time.
On Wall St., the Dow climbed 306 points higher in afternoon trading to 32,959 as investors watched the Federal Reserve push interest rates another 0.75% higher and may slow down its aggressive policy moving forward. Energy futures were also in the green today, with crude oil up 1.75% this afternoon to $89 per barrel. Diesel was up more than 1.5%, while gasoline jumped 3.75% higher. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of corn (+4,500), soybeans (+10,500), soyoil (+1,500) contracts but were net sellers of soymeal (-3,000).
Corn
Corn prices followed wheat lower on Russia’s promise of safe passage for Ukrainian vessels in Black Sea shipping channels, incurring double-digit losses by the close. December futures dropped 11.25 cents to $6.8650, with March futures down 10.25 cents to $6.9225.
Corn basis bids were steady to mixed across the central U.S. on Wednesday after spilling 5 to 10 cents lower at four Midwestern locations while firming 7 to 15 cents at two other locations today.
Ethanol production rose for the fifth consecutive week, reaching a daily average of 1.040 million barrels for the week ending October 28, per the latest data from the U.S. Energy Information Administration, released earlier today. It was also the largest weekly turnout since early July.
Ahead of the next USDA export report, out Thursday morning and covering the week through October 27, analysts expect to see corn sales ranging between 9.8 million and 26.6 million bushels.
China has traditionally leaned heavily on the United States and Ukraine for its corn imports, but the country has recently completed the approval process for more than a hundred Brazilian corn export facilities so it can ramp up sales and diversify its sources amid geopolitical turmoil in the Black Sea region and high prices in the U.S. China’s total corn imports during the 2022/23 marketing year could reach 708.6 million bushels.
Grain traveling the nation’s railways saw another 25,653 carloads last week. That brings cumulative totals for 2022 up to 950,475 carloads, trending 4.2% below last year’s pace so far.
Preliminary volume estimates were for 328,686 contracts, which was moderately above Tuesday’s final count of 260,651.
Soybeans
Soybean prices bucked the overall bearish sentiment for grains on Wednesday, with export optimism providing some incentive for traders to engage in another round of technical buying today. November futures picked up 4.25 cents to $14.40, while January futures added 6.75 cents to $14.5450.
Soybean basis bids were mostly steady across the central U.S. but did rise 5 cents at an Indiana processor and 15 cents at an Iowa river terminal on Wednesday.
Prior to tomorrow morning’s export report from USDA, analysts think the agency will show another robust round of soybean sales, with trade guesses ranging between 25.7 million and 61.5 million bushels for the week ending October 27. Analysts also expect to see soymeal sales ranging between 150,000 and 410,000 metric tons, plus up to 30,000 MT of soyoil sales last week.
USDA reported Tuesday afternoon that U.S. soybean crushings reached 168 million bushels in September, which was lightly above the average trade guess of 167.6 million bushels. It was also a moderate decline from August’s tally of 175.0 million bushels but ahead of year-ago results of 164.1 million bushels.
The latest results from the Purdue University / CME Group’s Ag Economy Barometer showed farmer sentiment dropped another 10 points in October for a new reading of 102 (anything above 100 is still considered net positive). Current readings are now down to similar levels observed in late 2015 and early 2016. More than 40% of respondents indicated that high input costs are their current top concern. Click here to review additional results from the October survey.
Preliminary volume estimates were for 177,607 contracts, sliding 21% below Tuesday’s final count of 225,349.
Wheat
Wheat prices saw severe cuts that mostly ranged between 4% and 6% on a substantial round of technical selling after Russia promised to resume its Black Sea shipping deal. December Chicago SRW futures tumbled 57.5 cents to $8.45, December Kansas City HRW futures lost 48.75 cents to $9.4125, and December MGEX spring wheat futures dropped 41 cents to $9.4875.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 23.9 million bushels for the week ending October 27.
Russia indicated earlier today that it would continue to participate in a deal that allows safe passage of Ukrainian vessels departing Black Sea ports – a deal that Russia had walked away from over the weekend. The about-face came after Russia’s defense ministry indicated it had received guarantees from Ukraine that it would not conduct military operations in the Black Sea grain corridor.
Ukraine’s agriculture ministry reports that the country’s grain exports during the 2022/23 marketing year are down 32% so far, with 13.4 million metric tons since the beginning of July. Exports include wheat sales totaling 187.4 million bushels and corn sales totaling 260.9 million bushels. Ukraine is among the world’s top exporters of both of those commodities.
Jordan issued an international tender to purchase 4.4 million bushels of milling wheat from optional origins that closes on November 15. The country failed to make any purchases in its previous tender that closed yesterday. The new tender is divided into two consignments that will be for delivery in March and April.
China plans to auction off another 1.5 million bushels of its state wheat reserves on November 9, according to a statement from the country’s National Grain Trade Center. China sold 100% of the wheat it offered for sale at its last auction held on October 26.
Preliminary volume estimates were for 161,566 CBOT contracts, moving moderately above Tuesday’s final count of 132,371.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
697.25
680
687.5
-11.25
23-Mar
702
685.25
692.75
-10.25
Soybeans
22-Nov
1445
1421.25
1440
4.25
23-Jan
1457.75
1431
1454
6.75
Soymeal $/ton
23-Jan
419.5
412.8
417
-1.1
Soyoil cents/lb
23-Jan
73.57
70.34
73.28
2.26
Wheat $/bushel
22-Dec
902
837.75
846
-57.5
23-Mar
919.75
857
865
-55
KC Wheat
22-Dec
990.25
936
940.25
-48.75
23-Mar
986.25
934.25
938.75
-47.5
MPLS Wheat
22-Dec
993.25
945
949.25
-41
23-Mar
1002.75
956.5
960.5
-40.25
Live Cattle cents/lb
22-Oct
152.5
151.2
151.55
-0.4
Feeder Cattle cents/lb
23-Jan
180.725
179.4
180.3
2.1
Lean Hogs cents/lb
23-Feb
88.075
86.95
87.175
-1.275
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Dec
90.36
87.72
89.34
0.97
Diesel
22-Nov
3.692
3.5526
3.6783
0.0572
Unleaded Gasoline $/gallon
22-Nov
2.7065
2.5813
2.6865
0.092
Natural Gas
23-Jan
6.62
6.16
6.52
0.44
U.S. Dollar Index
22-Dec
111.485
110.26
111.355
-0.004
Gold $/ounce
22-Dec
1673.1
1647
1664.7
19.7
Copper
22-Nov
3.5015
3.4985
3.5015
-0.008
Fertilizer Swaps
(as of 10/28)
DAP Tampa-index
700.0
0
DAP-New Orleans
790.9
-11.02
Urea-New Orleans
611.8
-38.58
Urea-Middle East
647.5
-55
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
614.5
-2.76
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