Afternoon report: Corn and soybeans also make solid inroads to start the week.
As the war in Ukraine rages on, the focus returned to tightening global supplies and export optimism for U.S. grains, which led to solid gains for corn, soybean and wheat prices on Monday. Corn prices were up around 2% by the close, with soybeans gaining 1.25% in today’s session. Wheat prices fared even better, with contracts jumping as high as 2.75% today.
Plenty more wet weather is on its way later this week, with most parts of the Midwest and Plains at least receiving some measurable moisture between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The Mid-South and upper Midwest are likely to see the highest totals. Later on, NOAA’s 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between April 11 and April 17, with warmer-than-normal conditions likely for most areas east of the Mississippi River next week.
On Wall St., the Dow shifted 80 points higher in afternoon trading to 34,898. Tech stocks led the way, with some strategists calling it a “relief rally” after they were hit so hard in Q1 2022. Energy futures jumped higher after talks of Russian sanctions heated up. Crude oil rose 4% this afternoon to $103 per barrel. Diesel climbed 3.5%, with gasoline up more than 1.5%. The U.S. Dollar firmed moderately.
Last Friday, commodity funds were net buyers of soyoil (+3,500) contracts but were net sellers of corn (-4,000), soybeans (-14,500), soymeal (-9,000) and CBOT wheat (-3,500).
Corn
Corn prices followed a broad range of other commodities higher today, as the ongoing war in Ukraine continues to prompt plenty of legitimate questions about global grain supplies. A flash sale to China, announced this morning, lent additional support. May futures rose 14.25 cents to $7.4925, with July futures up 16.5 cents to $7.3825.
Corn basis bids were steady to mixed on Monday after rising 3 to 4 cents higher at two ethanol plants and falling 2 to 4 cents lower at two other Midwestern locations.
Private exporters announced to USDA the sale of 42.7 million bushels of corn to China. Of the total, 62% is for delivery during the current marketing year, with the remainder for delivery in 2022/23. It was the largest single-day grain sale to China since May 2021. Click here for a full list of recent flash sales reported to USDA.
Corn export inspections slid 5.3% lower from a week ago, to 60.2 million bushels. Still that was toward the higher end of trade estimates, which ranged between 31.5 million and 65.0 million bushels. China was the No. 1 destination, with 18.1 million bushels. Cumulative totals for the 2021/22 marketing year are still running nearly 20% behind last year’s pace, with 1.203 billion bushels.
Is unlocking acres tied up in the Conservation Resource Program (CRP) a viable option for shoring up potential global grain shortages in the wake of Russia’s invasion of Ukraine? Several agriculture groups are urging USDA to consider this strategy. Farm Futures policy editor Jacqui Fatka takes a closer look at the situation – click here to learn more.
Preliminary volume estimates were for 285,036 contracts, trending moderately lower than Friday’s final count of 384,843.
Soybeans
Soybean prices trended 1.25% higher on general export optimism and spillover strength from other commodities including corn, wheat and crude oil – collecting double-digit gains by the close. May futures rose 19.25 cents to $16.02, with July futures up 21.25 cents to $15.88.
Soybean basis bids were largely unchanged to star the week bud did tick a penny higher at an Indiana processor and drop 2 cents at an Ohio elevator today.
Soybean export inspections firmed moderately higher week-over-week, reaching 27.1 million bushels. That was near the middle of analyst estimates, which ranged between 16.5 million and 36.7 million bushels. China was again the No. 1 destination, with 12.8 million bushels. Cumulative totals for the 2021/22 marketing year are still well below last year’s pace, with 1.623 billion bushels.
What comes to mind when you think about the success of your farm operation? How do you define success for your unique operation? Darren Frye, CEO of Water Street Solutions, put some thought into those two very important questions and served up his thoughts in his latest Finance First blog – click here to learn more.
European consultancy Strategie Grains expects a “virtual halt” of Ukrainian sunflower oil production and exports through at least June. “Damage to industrial, logistics and port facilities is very significant in much of the east of the country,” according to the group. Ukraine typically supplies the EU with around 90% of its sunflower oil exports.
Preliminary volume estimates were for 148,177 contracts, falling moderately below Friday’s final count of 210,339.
Wheat
Wheat prices made significant inroads Monday on a round of technical buying largely fueled by export concerns in the Black Sea region, which accounts for nearly one-third of the world’s wheat sales. Gains ranged between 1.8% and 2.8% today. May Chicago SRW futures climbed 27.25 cents to $10.1175, May Kansas City HRW futures rose 25.75 cents to $10.3875, and May MGEX spring wheat futures gained 19.75 cents to $10.85.
Wheat export inspections tilted slightly lower this past week, moving to 10.9 million bushels. That was on the lower end of trade guesses, which came in between 9.2 million and 20.2 million bushels. Mexico was the No. 1 destination, with 3.5 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 631.8 million bushels.
Russian consultancy Sovecon estimates that the country’s wheat exports reached 80.8 million bushels in March, which was the lowest monthly total since last July but still nearly double year-ago volumes. Russia is the world’s No. 1 wheat exporter.
India has officially exported a record amount of wheat for its 2021/22 fiscal year through March, shipping out an unprecedented 288.4 million bushels. That’s far above last year’s tally of 77.2 million bushels. India is typically not a major wheat exporter but has been able to capitalize on high prices in the wake of Russia’s invasion of Ukraine.
Meantime, Egypt – the world’s top wheat importer – says it has strategic reserves sufficient for the next 2.6 months. The country has been in negotiations with not only India, but also France, Argentina and the United States, as it seeks alternative sources from its typical Black Sea purchases.
Saudi Arabia has purchased just under 23 million bushels of wheat from optional origins in an international tender that recently closed. The grain is comprised of 11 consignments that will be delivered between September and November.
Bangladesh is considering offers in its international tender to purchase 1.8 million bushels of wheat that closed earlier today. The grain is for shipment 40 days after a contract is signed.
Preliminary volume estimates were for 68,291 CBOT contracts, sliding slightly below Friday’s final count of 74,594.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
752.25
734.75
750.5
14.25
22-Jul
740.5
722.75
739.25
16.5
Soybeans
22-May
1606
1576.75
1602.25
19.25
22-Jul
1590.5
1560.5
1589
21.25
Soymeal $/ton
22-Jul
451
441.6
447.8
4.9
Soyoil cents/lb
22-Jul
70.73
69.22
70.61
1.08
Wheat $/bushel
22-May
1014.5
984.75
1010.25
27.25
22-Jul
1014.5
985
1010
26.75
KC Wheat
22-May
1044.75
1016.5
1037.75
25.75
22-Jul
1046
1018.5
1039.25
26.5
MPLS Wheat
22-May
1091.25
1070
1085
19.75
22-Jul
1090.5
1068
1085
19.25
Live Cattle cents/lb
22-Apr
138.975
136.95
138.1
-0.55
Feeder Cattle cents/lb
22-May
166.05
162.15
162.475
-3.65
Lean Hogs cents/lb
22-May
112.925
109
109.675
-3.5
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-May
103.71
98.05
103.43
4.16
Diesel
22-May
3.6
3.4249
3.5536
0.1296
Unleaded Gasoline $/gallon
22-May
3.2435
3.118
3.2053
0.0518
Natural Gas
22-Jun
5.928
5.728
5.786
-0.009
U.S. Dollar Index
22-Jun
99.07
98.515
98.97
0.343
Gold $/ounce
22-May
1938
1917.8
1929.9
10.8
Copper
22-Apr
4.781
4.7075
4.7755
0.093
Fertilizer Swaps
(as of 03/25)
DAP Tampa-index
1,017.5
0
DAP-New Orleans
1,102.3
19.29
Urea-New Orleans
992.1
8.82
Urea-Middle East
1,130.0
10
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
686.2
24.8
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