Afternoon report: Corn and soybeans fade at the prospect of a speedier planting pace moving forward
Farmers are excited to finally see some warmer weather on the horizon, with highs in at least the upper 80s and lower 90s likely for large portions of the Midwest next Tuesday and Wednesday. Hopefully that will be enough to get more planters rolling and allow more farmers to get their 2022 crops in the ground. Unfortunately, it also meant a round of technical selling was featured on Friday, driving corn and soybean prices down more than 1.25%. Wheat prices generally fared better today but finished the session with mixed results.
More pockets of rain are possible between Saturday and Tuesday, especially in parts of the Northern Plains and eastern Corn Belt, with some areas set to gather another 1″ or more during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook anticipates more seasonally wet weather for the Northern Plains and upper Midwest between May 13 and May 19, with widespread warmer-than-normal conditions also likely.
On Wall St., Thursday’s selloff extended into trading today, with the Dow dropping 373 points lower in afternoon trading to 32,624. Energy futures were mixed. Crude oil firmed 1.25% to move above $109 per barrel. Gasoline jumped 2.5% higher, while nearby diesel contracts faded 2% lower. The U.S. Dollar softened slightly.
On Thursday, commodity funds were net buyers of corn (+1,000), soybeans (+2,500), soymeal (+1,000) and CBOT wheat (+13,000) contracts but were net sellers of soyoil (-2,500).
Corn
Corn prices fell around 1.5% lower during a choppy session Friday. The overall environment remains very bullish, but planting-friendly forecasts gave traders a chance to engage in some technical selling and profit-taking today. May futures dropped 11.5 cents to $7.9225, with July futures down 11 cents to $7.8650.
Corn basis bids were mostly steady across the central U.S. on Friday but did trend 10 cents higher at a Nebraska elevator and 6 cents lower at an Illinois ethanol plant today.
Ukraine’s spring plantings have reached 15.073 million acres through May 5. That includes 4.89 million acres of corn and 5.93 million acres of sunflower. Ukrainian farmers have also planted a modest amount of soybeans, barley and spring wheat in recent weeks. The country’s grain traders union, UGA, expects total corn plantings to reach 9.64 million acres this season.
Brazil’s Safras & Mercado fractionally lowered its estimates for the country’s 2021/22 corn production, moving it to 4.651 billion bushels. Summer corn production was slightly better than prior projections, while the safrinha crop trended lower.
France’s 2022 corn crop is now 84% planted through May 2, making solid inroads from last week’s pace of 60% and slightly behind 2021’s pace of 87%.
South Korea purchased 5.4 million bushels of animal feed corn, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival in August. South Korea also purchased 2.6 million bushels of animal feed corn from optional origins in a private deal that closed today. That grain is for arrival by the end of August.
Preliminary volume estimates were for 293,271 contracts, trending 63% higher than Thursday’s final count of 179,497.
Soybeans
Soybean prices followed corn lower today on a round of technical selling and profit-taking largely spurred by the expectation that planting pace will significantly pick up next week after weather turns hotter and drier across much of the Midwest. May futures fell 23 cents to $16.5550, with July futures down 22.25 cents to $16.2475.
Soybean basis bids were steady across the central U.S. on Friday. Farmer sales have been relatively light this week following the recent downturn in prices.
Brazil’s Safras & Mercado lowered its 2021/22 soybean production estimates by another 2.2% to land at 4.494 billion bushels, adding to the pile of projections that are below 4.5 billion bushels.
China plans to auction off 11.5 million bushels of its state reserves of imported soybeans on May 13. That’s 37% less that the last soybean auction the government issued. Some traders are speculating that the reduction is due to waning crushing demand.
South Korea purchased 61,000 metric tons of soymeal, likely sourced from South America, in an international tender that had sought to buy nearly double that amount. The grain is for arrival by October 1.
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Preliminary volume estimates were for 115,250 soybean contracts, sliding slightly below Thursday’s final count of 123,842.
Wheat
Wheat prices were mixed but mostly higher as traders continue to watch relatively tight global stocks and Ukraine’s ongoing struggles to export its grain. July Chicago SRW futures picked up 3 cents to $11.0950, July Kansas City HRW futures faded 5.25 cents to $11.7175, and July MGEX spring wheat futures added 9.75 cents to $12.1950.
Russian consultancy SovEcon slightly raised its estimates for the country’s 2021/22 wheat exports, which it now pegs at 1.253 billion bushels. SovEcon is even more bullish on Russia’s 2022/23 wheat export prospects, offering an estimate of 1.506 billion bushels. Russia is the world’s top wheat exporter.
Results from a Statistics Canada farm survey released this morning show the country’s all-wheat stocks falling to 371.1 million bushels through the end of March – a year-over-year drop of nearly 39%. That was even lower than analysts expected after they offered an average trade guess of 383.7 million bushels ahead of today’s report. StatsCan noted the drop in supplies was due to lower production after struggling through plenty of hot, dry weather last season.
French soft wheat crop quality dropped two points in the week through May 2, moving to 89% rated in good-to-excellent condition, per the country’s FranceAgriMer farm office. That’s still well above year-ago ratings of 79%, however. Growers are bracing for plenty of hot, dry weather that is forecasted later in May. France’s winter barley crop is also in relatively great shape, with 86% of the crop now rated in good-to-excellent condition.
Taiwan issued an international tender to purchase 1.5 million bushels of grade 1 milling wheat sourced from the United States that closes on May 13. The grain is for shipment between late June and early July.
Preliminary volume estimates were for 78,486 CBOT contracts, moving slightly below Thursday’s final count of 83,011.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
800
784.25
792.25
-11.5
22-Jul
796.75
776.5
784.75
-11
Soybeans
22-May
1674
1654
1655.5
-23
22-Jul
1650
1618
1622
-22.25
Soymeal $/ton
22-Jul
421
412.7
413.6
-6.1
Soyoil cents/lb
22-Jul
81.93
79.85
80.9
-0.81
Wheat $/bushel
22-May
1098.5
1098.5
1097
1
22-Jul
1127.5
1087.75
1108.5
3
KC Wheat
22-May
1181
1177
1159.25
15.25
22-Jul
1189.25
1154
1170.5
-5.25
MPLS Wheat
22-May
1204.5
22-Jul
1223
1198
1208.75
9.75
Live Cattle cents/lb
22-Apr
134.05
132.625
132.65
-1.125
Feeder Cattle cents/lb
22-May
176.025
174.225
174.5
0.125
Lean Hogs cents/lb
22-Jun
106.725
103.7
104.25
-2.825
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
111.18
107.24
110.27
2.01
Diesel
22-May
4.0966
3.9076
3.9989
-0.0424
Unleaded Gasoline $/gallon
22-May
3.797
3.6334
3.7777
0.119
Natural Gas
22-Jul
9.052
8.076
8.117
-0.724
U.S. Dollar Index
22-Jun
104.105
103.235
103.65
-0.152
Gold $/ounce
22-Jun
1894
1865
1886
12
Copper
22-May
4.299
4.23
4.24
-0.045
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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