Afternoon report: Corn, soybeans and wheat all trend lower in Tuesday’s session
Bearish sentiment has descended upon Wall St., and that anxiety pushed its way into the grain markets for a second consecutive session, even as a heatwave moves through the Midwest and threatens solid early season corn and soybean quality ratings. Corn prices eased 0.25% lower, with soybeans sliding 0.5% lower. Wheat prices were hit even harder, with losses ranging between 1% and 2% today.
There may not be a tremendous amount of rainfall across the Corn Belt between Wednesday and Saturday, but parts of Iowa, Wisconsin and southern Minnesota could gather another 1″ during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts widespread hot, dry conditions for almost the entire central U.S. between June 21 and June 27.
On Wall St., the Dow lost another 180 points this afternoon to 30,336 after incurring heavy losses yesterday, extending the latest selloff as investors anxiously await the next round of policy news from the Federal Reserve. Energy futures were mixed. Crude oil trended 1.25% lower, falling back below $120 per barrel while gasoline dropped nearly 1.5%. Diesel moved 2.5% higher, in contrast. The U.S. Dollar firmed moderately.
On Monday, commodity funds were net sellers of all major grain contracts, including corn (-1,000), soybeans (-15,500), soymeal (-5,500), soyoil (-3,000) and CBOT wheat (-1,000).
Corn
Corn prices trended slightly lower today, primarily due to spillover weakness from a broad set of other commodities. The threat of a widespread heatwave this week and next limited losses, however. July futures slipped 2.25 cents lower to $7.67, with September futures down 2.75 cents to $7.28.
Corn basis bids were steady to mixed on Tuesday after rising 3 to 5 cents higher at two Midwestern processors while falling as much as 5 cents at an Indiana ethanol plant today.
Private exporters announced to USDA the sale of 5.8 million bushels of corn to Mexico. Of the total, 70% is for delivery during the current marketing year, which began September 1. The remainder is for delivery in 2022/23.
Corn plantings reached 97% through Sunday, up from 94% a week ago. That was one point behind the average trade guess of 98%. It was also mostly in line with what has typically been planted by mid-June, with an identical prior five-year average of 97%. Nearly nine in ten acres (88%) is now emerged.
Corn quality ratings took a slight step back, with 72% of the crop now rated in good-to-excellent condition. Another 23% is rated fair (unchanged from last week), with the remaining 5% rated poor or very poor (up a point from last week).
Don’t forget – USDA’s quality ratings are a moving target, and data from prior seasons suggest that just because the crop starts strong, doesn’t mean it will stay strong throughout the season, according to grain market analyst Bryce Knorr. “The first nationwide corn ratings for 2022, released June 6, produced plenty of eyeroll emojis, pegging 73% of the crop in good or excellent condition,” he notes. “But history suggests that elevated rating won’t last long. Conditions on average declined 14% from the first to the last scores for the season.” Read more of Knorr’s latest analysis in yesterday’s Ag Marketing IQ blog.
In Brazil, Anec expects corn exports to reach 70.5 million bushels in June. That’s 23.4% above the group’s previous forecast issued a week ago.
Preliminary volume estimates were for 265,981 contracts, which was moderately lower than Monday’s final count of 334,693.
Soybeans
Soybean prices stumbled again on Tuesday after rising to near-record highs earlier this month, remaining prone to bouts of technical selling and profit-taking. USDA also noted solid quality ratings in its first assessment of the 2022 crop. July futures fell 9.5 cents to $16.98, with August futures down 12 cents to $16.1575.
Soybean basis bids showed some big variability on Tuesday after jumping 30 cents higher at a Nebraska processor while sliding 5 to 6 cents lower at four other Midwestern locations today.
Soybean planting progress came in as expected, moving from 78% last week up to 88% through Sunday. That’s identical to the prior five-year average but five points behind 2021’s pace of 93%. And 70% of the crop is now emerged, up from 56% a week ago but four points behind the prior five-year average of 74%.
USDA’s first look at quality ratings showed conditions nearly match the average trade guess of 70% rated in good-to-excellent condition, with 69% landing in those top two categories. Another 25% is rated fair, with the remaining 5% rated poor or very poor.
Ahead of the next National Oilseed Processors Association (NOPA) monthly report, analysts expect the group to show the U.S. May soybean crush at 171.552 million bushels. If realized, that would be 1% above April’s crush and nearly 5% higher year-over-year, making it the largest May crush on record. Soyoil stocks are expected to drop to an eight-month low of 1.765 billion pounds. NOPA will release its next report tomorrow.
Brazil’s Anec predicts the country’s soybean exports will reach 398.3 million bushels this month. That’s 15.2% above the forecast Anec made a week ago. The group also predicts Brazil will export 2.19 million metric tons of soymeal in June.
Preliminary volume estimates were for 195,183 contracts, shifting moderately below Monday’s final count of 231,154.
Wheat
Wheat prices spilled 1% to 2% lower on another round of technical selling today, incurring double-digit losses by the close. Prices still remain historically high, although they have been subject to bouts of high volatility in recent weeks. July Chicago SRW futures lost 21 cents to $10.50, July Kansas City HRW futures fell 20.5 cents to $11.4125, and July MGEX spring wheat futures dropped 14.25 cents to $12.0750.
Spring wheat plantings kept moving ahead, albeit at a slower clip than normal. Through Sunday, 94% of the crop was in the ground, up from 82% a week ago. In 2021, plantings were complete by this time of year, with a prior five-year average of 99%. Fifty-four percent of the crop is rated in good-to-excellent condition.
Winter wheat quality ratings were mixed. Top-end ratings improved a point, as expected, with 31% of the crop now rated in good-to-excellent condition. Another 27% is rated fair (down three points from last week), with the remaining 42% rated poor or very poor (up two points from last week).
Physiologically, 86% of the crop is now headed, up from 79% last week. And harvest progress reached 10%, which was up from the prior week’s progress of 5% but two points behind the prior five-year average of 12%.
Russian consultancy Sovecon estimates that the country’s wheat exports in June will only reach 33.1 million bushels. That would be its lowest monthly tally since last May, if realized. Russia is the world’s No. 1 wheat exporter.
Japan issued a regular tender to purchase 6.9 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, 53% is expected to be sourced from the U.S. The grain is for shipment in August.
Jordan purchased 2.2 million bushels of wheat from optional origins in an international tender that closed earlier today. The grain is for shipment in September.
Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on June 22. More details about the tender were not immediately available.
Preliminary volume estimates were for 79,096 CBOT contracts, trending 33% below Monday’s final count of 117,746.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
771
759
768.25
-2.25
22-Sep
733.25
722.25
729.5
-2.75
Soybeans
22-Jul
1728.25
1697
1698.5
-9.5
22-Sep
1566.5
1545.5
1547.25
-7.75
Soymeal $/ton
22-Aug
410
399.5
400.6
-6.2
Soyoil cents/lb
22-Aug
77.94
76.19
76.32
-1.05
Wheat $/bushel
22-Jul
1072.75
1046.5
1050.25
-21
22-Sep
1088
1061.75
1065.25
-21
KC Wheat
22-Jul
1161.75
1140
1142.25
-20.5
22-Sep
1168.25
1146.75
1149.25
-20.75
MPLS Wheat
22-Jul
1221.75
1205.75
1208.5
-14.25
22-Sep
1222
1206.75
1208.5
-13.25
Live Cattle cents/lb
22-Jun
135.575
134.025
135.1
1.1
Feeder Cattle cents/lb
22-Sep
174.65
172.7
173.425
-0.175
Lean Hogs cents/lb
22-Jul
108.425
105.55
106.6
-0.075
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jul
123.68
118.49
118.7
-2.23
Diesel
22-Jul
4.457
4.2488
4.3703
0.0869
Unleaded Gasoline $/gallon
22-Jul
4.1299
3.9534
3.9842
-0.0511
Natural Gas
22-Aug
8.885
7.01
7.238
-1.381
U.S. Dollar Index
22-Sep
105.325
104.48
105.315
0.349
Gold $/ounce
22-Jul
1830
1807.8
1806.2
-21.8
Copper
22-Jun
4.217
4.1565
4.1565
-0.06
Fertilizer Swaps
(as of 06/10)
DAP Tampa-index
1,105.0
-12.5
DAP-New Orleans
862.6
19.29
Urea-New Orleans
542.9
-63.38
Urea-Middle East
675.0
-24
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
620.6
-35.27
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