Morning report: Corn, soybeans struggle to break free from harvest pressures. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-5 cents
Soybeans down 7-14 cents; Soymeal down $2.30/ton; Soyoil down $0.09/lb
Chicago wheat up 6-7 cents; Kansas City wheat up 7-8 cents; Minneapolis wheat up 4-5 cents
*Prices as of 7:00am CDT.
Feedback from the Field updates! 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! Growers are progressing with soybean harvest much more quickly than their corn counterparts and many respondents are already feeling the pressure of dry soil on winter wheat sowing and crop development.
Here are a few of my favorite farmer insights from the past couple weeks.
“[We are] still carrying high 20% moisture as of last week, but [the crop is] standing well,” reported a Southern Iowa corn grower who had not yet started harvesting as of a week ago.
“Yield estimated 15% below 5-year-average due to drought conditions,” shared a corn producer in the eastern side of Michigan. “Sample test weights are in the 54s, down from last year’s (57s).”
“[I expected yields to be] less than previous 2 years,” hypothesized an Indiana soybean producer. “In fact, [the yield result] was even less than I expected. [The crop was] not a failure by any means, but 5 – 8 BPA less than indicated.”
“Extremely dry conditions,” shared a soybean grower in Arkansas a couple weeks ago. “We have used herbicide to kill the plant to harvest. Yields have been above expectations.”
“Dry,” lamented a Kanas wheat producer in the FFTF series. “Very dry,” echoed another winter wheat grower in Northern Ohio.
“No moisture to germinate seed,” added a Missouri wheat farmer.
Corn
Corn prices fell $0.01-$0.05/bushel overnight on continued harvest pressure, especially as weather forecasts clear in the Great Lakes region. Slow grain flows on the Mississippi River and a stronger dollar also influenced the bearish price environment in the corn market this morning. Without any bullish support during today’s trading session, corn prices could close the day at a two-week low.
The U.S. Energy Information Administration (EIA) releases its weekly Petroleum Inventory Status report today, which will highlight ethanol production through the week ending October 14. Weekly ethanol production has faltered over the past couple months as consumers grow increasingly sensitive to higher gasoline prices and scale back driving.
Demand signals have been weak for the domestic corn market lately as a shrinking cattle herd and lackluster export paces also factor into smaller corn usage early in the 2022/23 marketing year.
So corn markets will likely be responsive to today’s report, especially if weekly production numbers err on the lower side. Last week’s report found 932,000 barrels/day (39.144M gallons/day) of output through the week ending October 14, which marked a four-week high for ethanol production volumes.
Soybeans
Soybean prices tumbled $0.07-$0.14/bushel lower during the overnight trading session on many of the same sentiments plaguing the corn market this morning – a stronger dollar and low Mississippi River levels impeding export prospects as well as favorable harvesting conditions across much of the Heartland.
Wheat
Wheat markets largely shrugged off news of a Russian grain export quota to be placed early next year and a stronger U.S. dollar, instead rising $0.04-$0.08/bushel on global crop damage.
The U.S. and Argentine crops are suffering amid drought conditions while Australia’s crop, which is nearing harvest, is battling excessive rains. Planting paces in Ukraine have also been slower than expected.
Russia announced overnight it would be implementing a grain export quota during its second half of the 2022/23 marketing year. In recent years, these quotas have become standard practice as the government ensures adequate domestic supplies.
Dmitry Patrushev, minister of the Russian agriculture ministry, said overnight the proposed grains quota would span between mid-February 2023 to June 30.
“As for the quota, which we traditionally set in February for the second half of the season, we will certainly expand the export window,” Patrushev said in a statement, as reported by Reuters. “Preliminarily, we plan that its size will be 25 million tonnes without a breakdown by individual cereals. In addition, another 500,000 tonnes will be allocated for export from the far east regions.”
This is not exactly new news – as mentioned earlier, Russia has placed quotas on grain exports in recent years to provide price stability to domestic consumers. Of that 25.5MMT total, 100MMT (3.7 billion bushels) of wheat will be included in the quota system.
Russia likely harvested its largest wheat crop in history this summer, though export paces to its primary buyers in Africa and the Middle East have lagged early in Russia’s export season as insurance premiums and financing costs for Russian wheat cargoes remain high due to economic sanctions from Western countries.
Russia has also been smuggling stolen Ukrainian grain and shipping it into international channels, which increases the risk for buyers and financiers alike. According to a recent Bloomberg report, Russia has been carefully blending stolen Ukrainian grain with its own exportable supplies and turning off tracking devices on its ships to engage in multi-vessel cargo transfers.
“They’re using ship-to-ship transfers between legitimate and illegitimate products to mix them in order to try to launder them into a legitimate supply chain,” Ian Ralby, chief executive of I.R. Consilium, a maritime law and security consultancy. “They are working to launder the grain to create a degree of legitimacy or clarity of title so that they can engage in transactions with countries that really need the grains.”
The Bloomberg report estimates most of the trades are likely being made between Russian sellers and Iranian and Libyan buyers. I highly recommend checking it out!
Weather
Showers will move out of the Great Lakes and far Eastern Corn Belt regions today, according to NOAA’s short-term forecasts. Any accumulation in the region is likely to be light, which should help limit the length of any possible harvest delays.
The rest of the country will continue to enjoy clear skies from today through at least Saturday, paving the way for favorable harvest speeds where crop conditions will allow.
The clear skies have a shelf life, however. NOAA’s 6-10-day forecasts are trending warmer for most of the Midwest but also wetter during the early half of next week. The 8-10-day outlook is forecast to be warm and wet for regions in peak harvest mode during the second half of next week, though perhaps not with as high of a probability as during the earlier half.
This could narrow the window for optimal harvest progress to be made this week, especially if widespread showers grace next week’s forecasts. The Great Lakes region will be the most susceptible to harvest delays and quality downgrades if showers over the next couple days keep growers out of the fields and will likely limit the area’s time available to harvest before the wetter forecasts move into the region next week.
Financials
Wall Street is bracing for lower tech company earnings in today’s trading session as the S&P 500 traded 0.48% lower to $3,714.75 at last glance after closing yesterday’s session 1.1% higher.
“The numbers coming through on the earnings are more positive than expectations. That’s giving a short-term momentum,” Niall O’Sullivan, chief investment officer of multi-asset strategies at Neuberger Berman told the Wall Street Journal.
“But actions you would expect to see in the early stages of a recession are being taken which maybe speak to a more challenging environment coming,” O’Sullivan said of hiring freezes announced by Amazon earlier this month as well as some reorganization at large investment banks.
Oil prices edged higher overnight after the White House released its plans for a final 15-million-barrel release from the country’s strategic oil reserves to help tamper high energy costs.
What else I’m reading this morning on our website, FarmFutures.com:
Advance Trading’s Tom Barry helps farmers to embrace volatility by demystifying futures and options tools.
Senior editor Ben Potter analyzes how interest rate hikes will impact farmers.
The Inflation Reduction Act is slated to provide nearly $800 million to distressed USDA borrowers, with another $500 million also expected.
Bryce Knorr explains how small supplies and demand dynamics could influence grain market prices in the coming weeks.
Morning Ag Commodity Prices – 10/19/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.845
6.7675
6.7675
-0.0425
-0.62%
MAR ’23 CORN
$ / BSH
6.905
6.825
6.825
-0.045
-0.66%
MAY ’23 CORN
$ / BSH
6.9125
6.835
6.835
-0.0425
-0.62%
JUL ’23 CORN
$ / BSH
6.8525
6.7775
6.7775
-0.04
-0.59%
SEP ’23 CORN
$ / BSH
6.37
6.32
6.3225
-0.025
-0.39%
DEC ’23 CORN
$ / BSH
6.24
6.1875
6.1875
-0.03
-0.48%
AR2 ’24 CORN
$ / BSH
6.305
6.265
6.265
-0.0225
-0.36%
AY2 ’24 CORN
$ / BSH
6.3075
6.3
6.3025
-0.005
-0.08%
JUL ’24 CORN
$ / BSH
6.265
6.265
6.265
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
13.785
13.59
13.59
-0.13
-0.95%
JAN ’23 SOYBEANS
$ / BSH
13.885
13.6825
13.685
-0.135
-0.98%
MAR ’23 SOYBEANS
$ / BSH
13.9575
13.7775
13.7775
-0.1225
-0.88%
MAY ’23 SOYBEANS
$ / BSH
14.0325
13.8575
13.8575
-0.1175
-0.84%
JUL ’23 SOYBEANS
$ / BSH
14.0625
13.89
13.89
-0.1175
-0.84%
AUG ’23 SOYBEANS
$ / BSH
13.9125
13.77
13.77
-0.1075
-0.77%
SEP ’23 SOYBEANS
$ / BSH
13.605
13.48
13.4875
-0.085
-0.63%
NOV ’23 SOYBEANS
$ / BSH
13.49
13.3725
13.38
-0.0675
-0.50%
AN2 ’24 SOYBEANS
$ / BSH
13.4975
#N/A
13.4875
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
13.4375
13.4375
13.4375
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.425
#N/A
13.425
0
0.00%
DEC ’22 SOYBEAN OIL
$ / LB
69.35
68.6
68.65
-0.09
-0.13%
JAN ’23 SOYBEAN OIL
$ / LB
67
66.23
66.23
-0.29
-0.44%
DEC ’22 SOY MEAL
$ / TON
404
399
399.5
-2.3
-0.57%
JAN ’23 SOY MEAL
$ / TON
399.7
395.4
395.8
-1.9
-0.48%
MAR ’23 SOY MEAL
$ / TON
394.5
391
391.1
-1.7
-0.43%
MAY ’23 SOY MEAL
$ / TON
392
388.8
388.8
-1.3
-0.33%
JUL ’23 SOY MEAL
$ / TON
392.3
389.3
389.5
-0.9
-0.23%
DEC ’22 Chicago SRW
$ / BSH
8.61
8.47
8.5675
0.0725
0.85%
MAR ’23 Chicago SRW
$ / BSH
8.79
8.6725
8.7425
0.065
0.75%
MAY ’23 Chicago SRW
$ / BSH
8.8725
8.765
8.825
0.0575
0.66%
JUL ’23 Chicago SRW
$ / BSH
8.85
8.7475
8.795
0.05
0.57%
SEP ’23 Chicago SRW
$ / BSH
8.865
8.7075
8.8075
0.05
0.57%
DEC ’23 Chicago SRW
$ / BSH
8.9075
8.8125
8.83
0.0275
0.31%
AR2 ’24 Chicago SRW
$ / BSH
8.8875
8.8325
8.8525
0.065
0.74%
DEC ’22 Kansas City HRW
$ / BSH
9.57
9.4225
9.5275
0.0825
0.87%
MAR ’23 Kansas City HRW
$ / BSH
9.5425
9.415
9.5025
0.0775
0.82%
MAY ’23 Kansas City HRW
$ / BSH
9.5275
9.39
9.4775
0.07
0.74%
JUL ’23 Kansas City HRW
$ / BSH
9.4275
9.3375
9.41
0.07
0.75%
SEP ’23 Kansas City HRW
$ / BSH
9.4225
9.3625
9.3625
0.05
0.54%
DEC ’23 Kansas City HRW
$ / BSH
9.41
9.4025
9.41
0.0775
0.83%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.2625
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.67
9.555
9.6225
0.0625
0.65%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.7375
9.6375
9.6675
0.0375
0.39%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.7925
9.685
9.725
0.0375
0.39%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.795
9.74
9.795
0.1
1.03%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.3775
9.34
9.3775
0.0325
0.35%
DEC ’23 MLPS Spring Wheat
$ / BSH
9.4
#N/A
9.33
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
9.0875
0
0.00%
DEC ’21 ICE Dollar Index
$
112.87
111.78
112.77
0.776
0.69%
NO ’21 Light Crude
$ / BBL
84.2
82.59
84.12
1.3
1.57%
DE ’21 Light Crude
$ / BBL
83.41
81.72
83.15
1.08
1.32%
NOV ’22 ULS Diesel
$ /U GAL
4.0164
3.9049
3.9191
-0.0744
-1.86%
DEC ’22 ULS Diesel
$ /U GAL
3.6524
3.5451
3.568
-0.0611
-1.68%
NOV ’22 Gasoline
$ /U GAL
2.5883
2.5485
2.5775
0.0269
1.05%
DEC ’22 Gasoline
$ /U GAL
2.4369
2.3976
2.4281
0.0207
0.86%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
174.825
0
0.00%
NOV ’22 Feeder Cattle
$ / CWT
0
#N/A
177.825
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
148.475
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
149.775
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
86.475
0
0.00%
FEB ’23 Live Hogs
$ / CWT
0
#N/A
87.8
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.74
21.74
21.74
0
0.00%
NOV ’22 Class III Milk
$ / CWT
20.75
20.7
20.74
0.04
0.19%
DEC ’22 Class III Milk
$ / CWT
19.6
19.53
19.53
-0.18
-0.91%
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