Morning report: Global macroeconomic concerns continue to weigh on markets ahead of ECB meeting. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-4 cents
Soybeans up 2-4 cents; Soymeal up $3.10/ton; Soyoil down $0.48/lb
Chicago wheat up 4-5 cents; Kansas City wheat up 4 cents; Minneapolis wheat up 6-10 cents
*Prices as of 6:50am CDT.
Feedback from the Field updates! How does your farm’s crop conditions stack up against other farms around the country? Click this link to take the survey and share updates about your farm’s crop development. 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!
Export updates
USDA has discontinued its weekly export sales report until further notice after an unsuccessful try to revamp the old system went awry a couple weeks ago. But the agency is still releasing updated data measures to provide some insights as to where export volumes may be headed.
Yesterday, in conjunction with the U.S. Census Bureau, USDA released updated July 2022 export volumes and sale values. This export measure is widely accepted by forecasters at the World Ag Outlook Board, the branch of USDA responsible for publishing the World Agricultural Supply and Demand Estimates (WASDE) report and is subsequently used as the primary measure of U.S. ag exports.
There wasn’t a lot of new news to report from yesterday’s data updates, but the new monthly values did continue to hold optimism in the U.S. corn, soybean, and wheat export markets. Falling futures prices and some price resistance by buyers kept some of the monthly gains at bay in July 2022.
For corn, July 2022 volumes dipped 17% on the month to 180.4 million bushels. This was not an unusual occurrence as peak corn export season typical spans from February to June. So this lower July reading was not really a surprise for market watchers.
The previously mentioned futures price slide (at one point in July, Sep22 corn futures had dipped 20% lower before rallying again) also eroded 18% of corn export earnings from the previous month’s tally. About $1.5 billion worth of U.S. corn was shipped into international channels in July 2022. While it was 339 million fewer bushels from the previous month, it was still the 13th largest monthly export sales figure for corn and trailed last July’s haul of 1.6 billion bushels as the second largest July corn export revenue on record.
Marketing year to date corn export volumes continue to trail year-ago values by nearly 37%. But higher prices for most of the 2021/22 marketing year has pushed marketing year to date corn export revenues 5% higher than the same time last year.
July is typically a strong month for wheat exports (peak season lasts from mid-April to late September) but growing global economic uncertainty pushed the dollar to new heights and made U.S. wheat a less competitively priced option relative to European wheat supplies in July.
Yesterday’s data reflected that dynamic, as monthly wheat export volumes dipped 5% lower from June 2022 to 55.7 million bushels. July 2022 wheat export revenues also edged 10% lower from the previous month on futures prices downturns, falling to $647 million.
So far in the 2022/23 wheat marketing year, higher prices are largely offsetting lower export volumes relative to a year ago. Through the first two months of the year, wheat export sales are trending 16% higher than the same time in 2021/22 at $1.4 billion. But wheat volumes are nearly a quarter (23%) lower than last year during that same time period.
Part of it is likely to due hard red winter wheat crop shortfalls in the Plains this summer, but also due in part to high wheat costs pricing out some international buyers.
Soybean export volumes in July 2022 inched up slightly from the previous month, following the unseasonal spring buying spree from China earlier this year. July 2022 soybean export volumes rose 2% from June to 85.4 million bushels. The volume uptick pushed soybean export revenues for the month up 0.6% to $1.5 billion.
Soybean exports are likely to notch new records in 2021/22 for price, as marketing year to date revenues of $31 billion are trending 13% higher than year-ago values. Volumes are trending nearly 9% lower than a year ago on tighter supplies, but the high prices are likely to keep revenue prospects favorable for U.S. farmers selling their soybeans into international channels.
More USDA data on the way
On Tuesday, USDA announced that the National Agricultural Statistics Service (NASS) will review and potentially update 2022 acreage estimates based on Farm Service Agency (FSA) and Risk Management Agency (RMA) data.
Translation: NASS will update corn and soybean acreages in next week’s WASDE and Crop Production reports based on Prevent Plant acreage and crop insurance info reported to FSA and RMA earlier this year.
This is not typically standard practice – NASS usually waits until the FSA and RMA have finalized their data and issues revisions in the October Crop Production and WASDE reports. However, a NASS statement released on Tuesday indicated that “the data are sufficiently complete this year to consider adjustments in September.”
Analysts have scrambled over the last couple days to revise their pre-report 2022 U.S. production estimates to account for potential acreage shifts, with all of the trade forecasts just being released last night, with only two business days remaining until USDA releases the September 2022 WASDE and Crop Production report.
Keep an eye on our site, www.FarmFutures.com, for a preview coming of Monday’s USDA reports. This latest announcement lays the ground for another exciting and potentially volatile report day!
Corn
Corn prices edged $0.01-$0.04/bushel lower this morning on persistent fears about a broad economic contraction at play in the global markets. Lower energy prices paved the way for corn’s losses this morning after worries about Russia’s cooperation with Ukrainian grain shipments propped up prices yesterday.
“Grain markets got a boost from Putin’s Ukraine export corridor threats yesterday, but most other agriculture markets are pinned lower by the bearish macro mood,” Peak Trading Research said in a note, as reported by Reuters.
Soybeans
Soybean prices held strength despite the gloomy global macroeconomic outlook this morning, posting $0.01-$0.02/bushel gains. Any upward price movement will likely be limited by competitive farmer sales in Argentina, ongoing recession worries, and muted Chinese demand ahead of peak export season.
Wheat
Wheat prices rose $0.03-$0.09/bushel on continued worries about Russia’s willingness to cooperate with Ukrainian grain cargoes in the Black Sea. Prices rallied yesterday after Russian president Vladimir Putin publicly criticized the current “Grain Initiative” for not focusing shipments solely on nations teetering on the edge of food insecurity (I addressed some of the nuances surrounding Putin’s criticisms in yesterday’s newsletter. Bottom line – Putin is overreaching with his criticisms).
“The wheat market is, naturally, sensitive to any suggestion the corridor might be closed or, as in this case, it will be ‘narrowed’,” Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, told Reuters this morning.
The dollar weakened slightly overnight, paving the way for wheat gains. But global macroeconomic concerns, especially ahead of today’s European Central Bank meeting, continue to hold back any further gains in the wheat market.
Weather
Today should be the last day of blistering heat in the Plains before fall weather sets in (finally), according to NOAA’s short-range forecasts. Highs will reach into the 100s today in the Central Plains while the Eastern Corn Belt enjoys more moderate mercury readings.
Today will likely be the last day of mostly clear skies around the Heartland before a rains system begins to move into the Northern and Central Plains overnight. The system is expected to hover over the Central Plains and Upper Midwest through Saturday.
The 6-10-day NOAA outlook is forecasting above average chances for excessive heat for most of the country, except the lower half of the Mississippi River Valley and most of the Southeast, over the next 10 days. The mid-portion of the country will remain dry during that time, though parts of the drought-stressed Western Plains could see above average chances for rainfall during that time.
Above average heat will continue to persist across nearly all of the country except the West Coast in the 8-14 day NOAA outlook, Dry weather will continue to plague the Southern Plains during that time, though chances for rain are now trending higher for the Upper Midwest and Northern Plains through the middle of September.
Financials
S&P 500 futures wavered between gains and losses during the overnight trading session, landing 0.01% lower at last glance at $3,979.75 on concerns about how the European Central Bank is going to address high inflation in their meeting today. Energy prices were on track to record losses for a third straight session as global recession fears continue to reverberate across the world.
What else I’m reading this morning on our website, FarmFutures.com:
Mike Wilson shares insights about how the next generation may be shaking up the farm business world.
Bryce Knorr points out that corn shows better odds for rallies over the coming month.
What are you doing with your bushels this fall? Advance Trading’s Luke Williams poses that question to readers to help direct fall marketing decisions.
Farm finances are showing glimmers of hope, according to the Purdue Ag Economy Barometer. But rising input costs and interest rate still represent challenges for farmers.
Farm Futures’ 2023 Acreage Projections are live on our website. Spoiler alert: corn and winter wheat are poised to reign supreme next year.
Morning Ag Commodity Prices – 9/8/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.795
6.75
6.75
-0.0175
-0.26%
DEC ’22 CORN
$ / BSH
6.7525
6.6725
6.69
-0.02
-0.30%
MAR ’23 CORN
$ / BSH
6.8025
6.7225
6.735
-0.0225
-0.33%
MAY ’23 CORN
$ / BSH
6.8075
6.735
6.7475
-0.02
-0.30%
JUL ’23 CORN
$ / BSH
6.77
6.6925
6.705
-0.0175
-0.26%
SEP ’23 CORN
$ / BSH
6.375
6.31
6.325
-0.02
-0.32%
DEC ’23 CORN
$ / BSH
6.225
6.165
6.1875
-0.0125
-0.20%
AR2 ’24 CORN
$ / BSH
6.28
6.255
6.255
-0.015
-0.24%
MAY ’24 CORN
$ / BSH
5.5
#N/A
6.295
0
0.00%
SEP ’22 SOYBEANS
$ / BSH
14.845
14.8425
14.845
0.1775
1.21%
NOV ’22 SOYBEANS
$ / BSH
13.9725
13.8
13.8925
0.0575
0.42%
JAN ’23 SOYBEANS
$ / BSH
14.025
13.8575
13.9525
0.065
0.47%
MAR ’23 SOYBEANS
$ / BSH
14.0475
13.89
13.9725
0.0525
0.38%
MAY ’23 SOYBEANS
$ / BSH
14.0675
13.9275
14.0025
0.055
0.39%
JUL ’23 SOYBEANS
$ / BSH
14.06
13.91
13.9975
0.0625
0.45%
AUG ’23 SOYBEANS
$ / BSH
13.8775
#N/A
13.7875
0
0.00%
SEP ’23 SOYBEANS
$ / BSH
13.5425
#N/A
13.4375
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.375
13.285
13.3075
0.005
0.04%
AN2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.3325
0
0.00%
AR2 ’24 SOYBEANS
$ / BSH
0
#N/A
13.27
0
0.00%
SEP ’22 SOYBEAN OIL
$ / LB
68.69
68
68
0.27
0.40%
OCT ’22 SOYBEAN OIL
$ / LB
64.1
62.85
63.41
-0.27
-0.42%
SEP ’22 SOY MEAL
$ / TON
439.4
439.2
439.4
3.3
0.76%
OCT ’22 SOY MEAL
$ / TON
418.5
415.2
417.8
2.8
0.67%
DEC ’22 SOY MEAL
$ / TON
414.7
411.4
413.9
2.4
0.58%
JAN ’23 SOY MEAL
$ / TON
411.8
408.8
411.6
2.7
0.66%
MAR ’23 SOY MEAL
$ / TON
406.2
403.6
405.8
2.1
0.52%
SEP ’22 Chicago SRW
$ / BSH
0
#N/A
8.265
0
0.00%
DEC ’22 Chicago SRW
$ / BSH
8.5725
8.37
8.4725
0.03
0.36%
MAR ’23 Chicago SRW
$ / BSH
8.695
8.5075
8.615
0.04
0.47%
MAY ’23 Chicago SRW
$ / BSH
8.7575
8.59
8.685
0.0475
0.55%
JUL ’23 Chicago SRW
$ / BSH
8.7075
8.5425
8.64
0.045
0.52%
SEP ’23 Chicago SRW
$ / BSH
8.735
8.645
8.6825
0.04
0.46%
DEC ’23 Chicago SRW
$ / BSH
8.825
8.6725
8.7675
0.0425
0.49%
SEP ’22 Kansas City HRW
$ / BSH
9.0225
#N/A
9.015
0
0.00%
DEC ’22 Kansas City HRW
$ / BSH
9.125
8.955
9.045
0.03
0.33%
MAR ’23 Kansas City HRW
$ / BSH
9.14
8.9925
9.07
0.035
0.39%
MAY ’23 Kansas City HRW
$ / BSH
9.095
9.05
9.0775
0.04
0.44%
JUL ’23 Kansas City HRW
$ / BSH
9.005
8.945
8.9675
0.05
0.56%
SEP ’23 Kansas City HRW
$ / BSH
9
8.8875
9
0.1075
1.21%
DEC ’23 Kansas City HRW
$ / BSH
8.995
8.995
8.995
0.045
0.50%
SEP ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
8.8225
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.1475
8.965
9.0875
0.0875
0.97%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.2575
9.1
9.18
0.0625
0.69%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.3
9.23
9.3
0.105
1.14%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.3225
#N/A
9.1925
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
8.995
8.995
8.995
0.07
0.78%
DEC ’23 MLPS Spring Wheat
$ / BSH
8.995
8.995
8.995
0.0575
0.64%
SEP ’21 ICE Dollar Index
$
109.885
109.33
109.365
-0.467
-0.43%
OC ’21 Light Crude
$ / BBL
82.98
81.2
82.53
0.59
0.72%
NO ’21 Light Crude
$ / BBL
82.65
80.89
82.19
0.56
0.69%
OCT ’22 ULS Diesel
$ /U GAL
3.6057
3.5333
3.5801
-0.0059
-0.16%
NOV ’22 ULS Diesel
$ /U GAL
3.5358
3.4671
3.5072
-0.0043
-0.12%
OCT ’22 Gasoline
$ /U GAL
2.3395
2.289
2.3283
0.0206
0.89%
NOV ’22 Gasoline
$ /U GAL
2.2966
2.2487
2.2878
0.0208
0.92%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
182.025
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
183.95
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
144.25
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
150.075
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
91.075
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
83.6
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.88
19.85
19.85
0.01
0.05%
OCT ’22 Class III Milk
$ / CWT
20.33
20.33
20.33
-0.01
-0.05%
NOV ’22 Class III Milk
$ / CWT
21.05
20.9
21.05
0.2
0.96%
