Afternoon report: Corn, soybeans and wheat all trend higher in Tuesday’s session.
Facing losses on Monday, grain prices took the opportunity to rebound after taking in USDA’s latest set of planting progress and crop quality data in a choppy session Tuesday, with the ongoing war in Ukraine lending additional price support. Wheat prices fared the best, with some contracts rising more than 1.5% higher today. Corn and soybean gains were more modest as each commodity picked up gains of around 0.5%.
Large portions of the central U.S. can expect to see at least some measurable rainfall between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The Northern Plains and upper Midwest are likely to see the largest totals during this time. Further out, NOAA’s 8-to-14-day outlook predicts seasonally hot weather for the Central Plains between May 17 and May 23, with drier-than-normal weather likely for the Plains and western Corn Belt.
On Wall St., the Dow inched 2 points lower to 32,242 as the selloff earlier this week looks to draw to a close. “We’ve checked a lot of the boxes that you’d want to check along the way to a correction,” chief market strategist for National Securities Art Hogan told CNBC. Energy futures were mixed. Crude oil spilled 3.25% lower this afternoon to fall just below $100 per barrel. Gasoline was down around 2.75%, while nearby diesel contracts jumped 2.75% higher. The U.S. Dollar firmed moderately.
On Monday, commodity funds were net sellers of all major grain contracts, including corn (-14,000), soybeans (-15,500), soymeal (-6,500), soyoil (-3,500) and CBOT wheat (-7,000).
Corn
Corn prices fought through a choppy session to land modest gains, thanks in part to USDA showing a slower-than-expected planting pace in its latest weekly crop progress report. May futures picked up 1.5 cents to $7.86, while July futures added 3.75 cents to $7.7575.
Corn basis bids were steady to firm on Tuesday after tracking 2 to 5 cents higher at here Midwestern locations today.
Yesterday afternoon, USDA’s crop progress report showed U.S. corn plantings at just 22% through May 8, up from 14% a week ago. Analysts were expecting to see a bit more progress, with an average trade guess of 25%. It’s also shockingly below 2021’s pace of 64% and the prior five-year average of 50%. Emergence reached 5%, up from 3% a week ago and also significantly behind the prior five-year average of 15%.
A Reuters poll of 10 forecasters show the expectation of a record-breaking corn crop in Brazil this season, despite some challenges with drought. The average estimate in the poll was 4.527 billion bushels. If realized, 2021/22 totals will climb 32% above the dismal tally a year ago.
The European Commission reported that 2021/22 EU corn imports reached 546.4 million bushels through May 8, putting it 4.8% ahead of last year’s pace so far.
South Korea purchased 2.6 million bushels of corn, likely sourced from South America, in a private deal that closed yesterday. The grain is for shipment in late June for arrival by August 20.
Forget the Ides of March – grain market analyst Bryce Knorr wants you to consider the Ides of May. “Planting progress by May 15 is a key variable in the model USDA uses for predicting ‘normal’ yields, as I wrote earlier this month,” he notes. Planting pace alone won’t make or break a crop. But it can affect the impact of summer weather for better, or worse.” Find out why Knorr argues that there’s a chance (“though very small”) that corn prices could climb to $11 per bushel in yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 210,848 contracts, shifting 24% below Monday’s final count of 276,902.
Soybeans
Soybean prices followed corn prices higher after USDA reported a slower-than-expected planting pace yesterday afternoon. May futures added 9 cents to $16.30, with July futures up 8.5 cents to $15.9375.
Soybean basis bids were steady to firm on Tuesday after rising 2 to 5 cents higher at three Midwestern locations today.
Soybean planting progress moved from 8% a week ago to 12% through Sunday. That was four points below the average trade guess of 16%. It’s also markedly behind 2021’s pace of 39% and the prior five-year average of 24%. Three percent of the crop is emerged, versus the prior five-year average of 4%.
Brazil’s Abiove fractionally raised its forecast for the country’s 2021/22 soybean production, moving it to a new tally of 4.607 billion bushels. That’s one of the more bullish estimates at the moment. Abiove left its forecast for Brazilian soybean exports unchanged, at 2.837 billion bushels. Anec estimates that Brazilian soybean exports in May alone will reach 390 million bushels.
European Union soybean imports during the 2021/22 marketing year have reached 443.5 million bushels through May 8, a year-over-year reduction of 6.9% so far. EU soymeal imports are also down from a year ago, with 13.93 million metric tons over the same period.
The next time you’re faced with a major operational decision, it would be prudent to ask the following three questions, according to Darren Frye, CEO of Water Street Solutions. First, does the decision align with your goals and values? Second, does the decision make sound financial sense? And third, have you sized up the opportunity that’s at stake? Frye elaborates in his latest Finance First blog – click here to learn more.
Preliminary volume estimates were for 106,160 contracts, moving slightly ahead of Monday’s final count of 155,850.
Wheat
Wheat prices firmed after a round of technical buying spurred by several factors, including poor crop quality in the U.S. coupled with challenges overseas that include everything from drought (France) to war (Ukraine). July Chicago SRW futures picked up 2.75 cents to $10.9550, July Kansas City HRW futures rose 11.25 cents to $11.7550, and July MGEX spring wheat futures gained 10.25 cents to $12.17.
Spring wheat plantings reached 27% through Sunday, up from 19% a week ago. Last year’s pace was 67%, and the prior five-year average is 47%. Nine percent of the crop is emerged, up from 5% a week ago and below the prior five-year average of 15%.
Winter wheat conditions are still dismal, but quality ratings did firm two points last week, with 29% rated in good-to-excellent condition. Analysts were generally expecting to see a one-point gain. Another 32% of the crop is rated fair (up two points from last week), with the remaining 39% rated poor or very poor (down four points from last week). Physiologically, 33% of the crop is headed, up from 23% last week.
European Union soft wheat exports for the 2021/22 marketing year reached 836.7 million bushels through May 8, which is trending slightly above year-ago totals so far. EU barley exports are running slightly behind last year’s pace, with 307.3 million bushels.
Brazil is a major global corn and soybean exporter, but it also ships out a modest amount of wheat. For May, wheat exports are expected to reach 3.8 million bushels according to Anec.
Japan issued a regular tender to purchase 7.2 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, 45% is expected to be sourced from the U.S. The grain is for shipment in July.
Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on May 23. The grain will be shipped 50 days after a contract is signed.
Preliminary volume estimates were for 55,420 CBOT contracts, tracking moderately below Monday’s final count of 70,160.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
790.75
782.5
786.5
1.5
22-Jul
778.75
769.25
775.25
3.75
Soybeans
22-May
1641.5
1623.5
1630
9
22-Jul
1605
1580.5
1592.25
8.5
Soymeal $/ton
22-Jul
407.9
398.6
401.5
0
Soyoil cents/lb
22-Jul
81.7
79.26
81.04
1.3
Wheat $/bushel
22-May
1098.5
1092
1083.25
0
22-Jul
1107
1083
1092.75
2.75
KC Wheat
22-May
1168
1167
1168.25
14.75
22-Jul
1179
1156.75
1175
11.25
MPLS Wheat
22-May
1219.5
1219
1212.25
19.75
22-Jul
1226
1206
1213.5
10.25
Live Cattle cents/lb
22-Apr
134.35
132.05
132.4
-1.15
Feeder Cattle cents/lb
22-May
174.85
171.55
171.7
-2.525
Lean Hogs cents/lb
22-Jun
102.725
100.15
101.75
0.45
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
104.16
98.86
100.1
-2.99
Diesel
22-May
3.99
3.7637
3.9595
0.1246
Unleaded Gasoline $/gallon
22-May
3.6636
3.5025
3.5399
-0.102
Natural Gas
22-Jul
7.543
6.521
7.439
0.333
U.S. Dollar Index
22-Jun
104.005
103.53
103.925
0.236
Gold $/ounce
22-Jun
1864.7
1838.7
Copper
22-May
4.251
4.13
4.1725
-0.0205
Fertilizer Swaps
(as of 05/06)
DAP Tampa-index
1,175.0
0
DAP-New Orleans
956.3
-33.07
Urea-New Orleans
713.8
-24.8
Urea-Middle East
795.0
-15
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
694.5
0
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