Afternoon report: Soybeans face moderate losses in Wednesday’s session
Grain prices were mixed in midweek markets, with traders still assessing Ukraine’s production and export challenges and reevaluating the latest weather forecasts and domestic sales expectations (more on that below). Corn prices took a 0.9% hit after a round of technical selling, while soybeans also closed with moderate losses. Wheat prices found some solid footing, in contrast, with most contracts rising around 1.5% higher today.
More rainfall is likely for the Central and Southern Plains between Thursday and Sunday, but very few areas in the Midwest will see any measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally dry weather around the Great Lakes region, with warmer-than-normal conditions likely for most of the United States between September 7 and September 13.
On Wall St., the Dow dropped 168 points in afternoon trading to 31,622 as investors remain skittish over the Federal Reserve’s aggressive interest rate stance in its fight against inflation. Energy futures remained in the red today following heavy overnight losses. Crude oil eroded 2.25% lower this afternoon to stay just below $89 per barre. Diesel dropped nearly 3%, with gasoline losing 4.25%. The U.S. Dollar softened slightly.
On Tuesday, commodity funds were net sellers of corn (-5,500), soybeans (-4,500), soymeal (-4,000) and CBOT wheat (-6,000) contracts and were roughly net even when trading soyoil contracts.
Corn
Corn prices faced a moderate setback after a round of technical selling on Wednesday. September futures dropped 6.5 cents to $6.7325, with December futures down 6.25 cents to $6.71.
Corn basis bids were mostly steady to weak on Wednesday after falling 2 to 5 cents lower at three interior river terminal and dropping 10 to 15 cents lower at two other Midwestern locations today. An Ohio elevator bucked the overall trend after rising 8 cents higher.
According to data from an exclusive grower survey from Farm Futures that were revealed at the 2022 Farm Progress Show, corn acres are expected to increase 5% in 2023 to 94.3 million acres. If realized, that would be the largest corn footprint in a decade. Assuming trendline yields, that could mean a total production boost of 8% next season to 15.459 billion bushels. Click here to learn more.
Ethanol production shifted lower for the fourth-consecutive week, falling to a daily average of 970,000 barrels in the week through August 26, per the latest data from the U.S. Energy Information Administration. It’s also the lowest weekly tally since late April. Stocks declined by 1% last week.
If the USDA releases its regularly scheduled export report tomorrow morning (the agency indicated it would withhold data until it resolves a technical issue in its new reporting system), analysts expect to see corn sales ranging between 15.7 million and 43.3 million bushels for the week ending August 25.
Grain traveling the nation’s railways saw another 19,458 carloads last week. That brings cumulative totals for 2022 up to 751,457 carloads, which is a year-over-year decrease of 5.1% so far.
Ukraine’s grain exports in August tumbled nearly 60% below year-ago results, with 2.26 million metric tons. That includes 52.4 million bushels of corn and 28.0 million bushels of wheat this month amid attempts to ramp up Black Sea port traffic back to pre-war levels.
Taiwan issued an international tender to purchase 2.6 million bushels of animal feed corn, sourced from either the United States, Argentina, Brazil or South Africa, which closes on September 7. The grain is for shipment starting in November.
South Korea has purchased 2.5 million bushels of animal feed corn, likely sourced from South America or South Africa, in a deal that closed earlier today. The grain is for arrival around December 5.
Preliminary volume estimates were for 221,420 contracts, which was moderately below Tuesday’s final count of 288,380.
Soybeans
Soybean prices fell again on Wednesday as mostly favorable weather forecasts for the first half of September triggered some technical selling. September futures dropped 5.5 cents to $15.0750, with November futures down 9.75 cents to $14.2275.
Soybean basis bids were mostly steady across the central U.S. on Wednesday but did tilt 20 cents higher at an Indiana processor and 7 cents lower at an Ohio elevator today.
Private exporters announced to USDA the sale of 6.1 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which begins September 1.
The latest Farm Futures grower survey suggests that soybean plantings could reach 87.3 million acres in 2023, which would be 0.8% below this season’s footprint, if realized. Assuming trendline yields, that would lead to a total production of 4.529 billion bushels next year. “Soybeans are going to lose a few acres in the Corn Belt to corn rotations next spring, but most of the 2023 soybean acreage shift will come from outside the Heartland,” according to Farm Futures grain market analyst Jacqueline Holland. “The Farm Futures survey forecasts lower soybean acreages in the Mississippi River Delta, which suggests that this year’s cotton production shortfalls could steal away acreage from soybeans next spring.”
Ahead of Thursday morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 25.7 million and 66.1 million bushels for the week ending August 25. Analysts also expect to see soymeal sales ranging between 50,000 and 500,000 metric tons, plus up to 35,000 MT of soyoil sales.
Argentina’s agriculture ministry reports the country’s 2021/22 soybean production came in at 1.617 billion bushels, which was a year-over-year decline of 4.3%. Argentine farmers have sold nearly 52% of their current crop so far, versus 62% at the same time last year. Farmers will begin planting their 2022/23 crops in September and October.
How do your farm’s crop conditions stack up against other operations in the U.S.? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
Preliminary volume estimates were for 104,292 contracts, sliding slightly below Tuesday’s final count of 116,002.
Wheat
Wheat prices made moderate inroads on Wednesday after a round of technical buying that was party triggered by reports that grain silos were damaged during Russian shelling of Ukraine’s second-largest port city of Mykolaiv yesterday. December Chicago SRW futures gained 12.75 cents to $8.33, December Kansas City HRW futures rose 15.25 cents to $9.13, and December MGEX spring wheat futures added 8.5 cents to $9.29.
Our exclusive Farm Futures survey shows that 2022/23 all-wheat acres could reach 48.842 million acres – a 3.9% year-over-year increase, if realized. Of the total, winter wheat acres could total 33.553 million acres, with spring wheat acres coming in at 12.289 million acres. If realized, that would be the largest winter wheat crop since the 2015/16 season.
Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 9.2 million and 23.9 million bushels for the week ending August 25.
Bangladesh is planning to purchase 18.4 million bushels of wheat from Russia, and is making separate deals to purchase rice from India and Vietnam. Additional details on shipment were not immediately available.
Preliminary volume estimates were for 73,676 CBOT contracts, trending moderately below Tuesday’s final count of 91,224.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
683
664.25
673.75
-6.5
22-Dec
680.5
661
670.5
-6.25
Soybeans
22-Sep
1524.5
1493.25
1507.5
-5.5
22-Nov
1442.5
1416
1422.5
-9.75
Soymeal $/ton
22-Oct
430
420
420.7
-8.5
Soyoil cents/lb
22-Oct
69.11
67.25
68.9
1.21
Wheat $/bushel
22-Sep
812.25
788.75
809
10.75
22-Dec
839.25
806.25
831.5
12.75
KC Wheat
22-Sep
921.25
894.25
924.25
12.25
22-Dec
915.75
885
912.5
15.25
MPLS Wheat
22-Sep
918.25
896.5
915.5
13.75
22-Dec
932.75
906.75
929.5
8.5
Live Cattle cents/lb
22-Aug
145
141.55
141.55
-0.95
Feeder Cattle cents/lb
22-Oct
184.1
182.9
183.375
0.1
Lean Hogs cents/lb
22-Dec
85.225
83.65
84.05
-1.45
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Oct
92.73
88.27
89.07
-2.57
Diesel
22-Sep
3.8313
3.6946
3.7024
-0.1147
Unleaded Gasoline $/gallon
22-Sep
2.7225
2.5684
2.5684
-0.126
Natural Gas
22-Oct
9.341
8.879
9.222
0.119
U.S. Dollar Index
22-Sep
109.17
108.335
108.6
-0.149
Gold $/ounce
22-Oct
1728.7
1711.7
1711
-12.2
Copper
22-Sep
3.5805
3.4465
3.5215
-0.0235
Fertilizer Swaps
(as of 08/26)
DAP Tampa-index
820.0
-20
DAP-New Orleans
815.7
-11.02
Urea-New Orleans
683.4
66.14
Urea-Middle East
795.0
47.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
476.8
22.05
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