Morning report: Strong domestic demand caps AM losses; wheat falls on latest Black Sea negotiations. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 3-5 cents
Soybeans down 5-11 cents; Soymeal up $0.40/ton; Soyoil down $1.34/lb
Chicago wheat down 18 cents; Kansas City wheat down 13-15 cents; Minneapolis wheat down 8-9 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates! Corn planting progress may be slowing down in the Heartland, but growers in the Upper Midwest are weighing prevent plant options, according to responses from growers in our latest Feedback from the Field column.
“No corn this year,” shared a Minnesota producer. “We are too far behind the calendar, in my opinion, for the crop to complete maturity.”
“Time for prevent plant,” echoed a Wisconsin corn grower.
Want to see how your farm’s progress stacks up against other growers across the country? Just click this link to take the survey and share updates about your farm’s spring 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!
Good morning! Global agricultural agencies spent the overnight session issuing updated production and export forecasts ahead of tomorrow’s World Agricultural Supply and Demand Estimates (WASDE) report. Here is our wrap-up of the estimates, which are likely to be considered in USDA’s forecasts.
Argentina: The Rosario Grains Exchange issued the following forecasts for soybean and wheat production.
The 2021/22 soybean harvest registered at 1.55 billion bushels (42.2MMT), up 2% from the Rosario Grains Exchange’s previous forecast. USDA currently estimates Argentina’s soybean crop at 1.54 billion bushels (42MMT).
Argentina is expected to plant 15.3 million acres of wheat for the 2022/23 marketing campaign, down 2% from the Exchange’s last forecasts. That will trigger a lower harvest, with the exchange now forecasting a 680-million-bushel 2022/23 Argentine wheat crop, compared to 735 million bushels projected by USDA. USDA has previously cited fertilizer availability and cutbacks as a potential source for lower 2022/23 grain and oilseed yields in South America.
The European Union: Top E.U. forecaster Strategie Graines lowered soft wheat production and export forecasts overnight, citing high prices as cause for potentially lower demand due largely to the Black Sea conflict.
The consultancy trimmed 70 million bushels from 2021/22 soft wheat exports to 1.03 billion bushels. USDA’s forecast currently stands at 1.14 billion bushels for all wheat exports out of the E.U.
E.U. soft wheat production for 2022 was cut 66 million bushels to 4.57 billion bushels on drought stress to the French soft wheat crop. USDA forecasts total 2022 E.U. wheat production at 5.02 billion bushels.
That translates into lower wheat exports from the world’s number two wheat supplier. Strategie Grains predicts 2022/23 E.U. soft wheat exports will now stand at 1.11 billion bushels. USDA’s forecast for total E.U. wheat shipments in 2022/23 stands at 1.32 billion bushels.
USDA’s forecasts are for all wheat varieties, while the overnight figures from Strategie Grains only include soft wheat estimates.
France: The E.U.’s top wheat producer kept soft wheat export forecasts within the E.U. unchanged but cut shipments outside the bloc for the 2021/22 season.
Soft wheat exports outside the E.U. for the 2021/22 are now projected at 334 million bushels, down 16% from last month’s forecast after an aggressive export season early in the marketing year.
Brazil: Brazil’s CONAB usually issues updated production and planting forecasts ahead of USDA’s WASDE reports, so keep an eye out for those over the next 24 hours. I expect to see them early tomorrow morning.
I’ll be publishing a preview of what to watch in tomorrow’s WASDE report on our website, FarmFutures.com, this morning. Keep an eye out if you are curious about what to watch for tomorrow!
Corn
Corn prices edged $0.03-$0.05/bushel lower this morning as markets await tomorrow’s USDA reports. Some profit-taking was likely at play after July 2022 corn futures contracts notched a one-week high in yesterday’s trading session.
Domestic demand expansion, rising energy prices, and hot and dry weather in the extended forecasts that could cause crop stress all contributed to yesterday’s rally.
Soybeans
Soybean prices dipped $0.03-$0.10/bushel overnight as markets weighed the latest Chinese soybean import data. Sharply lower palm oil prices due to accelerating Indonesian export paces also contributed to lower prices for the soy complex.
Profit-taking was also a factor this morning after the July 2022 futures contract flirted with a 10-year high in yesterday’s trading session. Strong end user demand trickled over from yesterday’s session to lift up soymeal prices overnight.
Chinese calendar year-to-date soybean imports are 0.4% lower than the same time last year, according to customs data released by China’s General Administration of Customs overnight. China imported 1.4 billion bushels of soybeans during the January – May 2022 timeframe.
May shipments totaled 356 million bushels, up fractionally (0.7%) from the same month a year ago. Tight soy crush margins and flat livestock feed demand continue to keep a lid on China’s soybean demand, especially amid surging crop prices following South America’s crop shortfalls earlier this year.
“As soybeans arrived in large volume, soybean meal inventories at crushing plants continued to rise. Demand from the end users was still flat, adding downward pressure to cash soymeal prices,” Zhu Rongping, analyst with the agriculture section of Mysteel, a China-based consultancy, told Reuters.
But May 2022 Chinese soybean import volumes were still 20% higher than the previous month, as delayed South American supplies and additional shipments from the U.S. arrived at Chinese ports.
“May imports were up marginally compared to last year, however some of that increase is likely shipments that were delayed in unloading due to the COVID situation and port congestion and are showing up in the data now,” Darin Friedrichs, co-founder of Shanghai-based consultancy Sitonia Consulting, told Reuters overnight.
“Soybean exports out of Brazil have dropped notably in the past two months, but that decline is too recent to be reflected in this May import data.”
Wheat
Wheat prices fell $0.08-$0.20/bushel overnight on weather improvements in the U.S. Plains and France. The market continues to digest varying statements between Russian and Ukrainian negotiators as global entities (Turkey, the U.N.) work to free up trapped Ukrainian grain supplies in the Black Sea.
“Ukraine’s export access remains an issue but there seems to have been little progress,” Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, told Reuters this morning.
Markets seemed to think that progress was afoot in the negotiations this morning, however, which led to lower wheat prices.
Black Sea drama
The Kremlin announced overnight that no agreement between Turkey and Ukraine has been reached on a deal to free up trapped Ukrainian grain supplies in the Black Sea. Also,
Millions could starve because of Russian blockade of Ukrainian ports- Zelenskiy
Fertiliser Costs Could Prolong Global Food Tensions – FAO.
Weather
Skies are forecast to be mostly clear across the Heartland today, according to NOAA’s short-range forecasts. The reprieve will likely end this evening, when showers and thunderstorms are expected to hit the Northern and Central Plains.
The system is slated to take a southeastern-moving trajectory, shifting into the Central Mississippi River Valley by tomorrow afternoon, which should allow for planting progress in the Northern Plains to continue until more showers are forecast in the region this weekend.
Warm temperatures forecast today should help encourage crop development, especially for corn crops and early planted soybeans. Rainfall over the next 24 hours in the Southern Plains could reach up to 1.5 inches.
NOAA’s 6- to 10-day forecasts updated yesterday are trending warmer and dryer for the Upper Midwest while the 8- to 14-day forecast is beginning to show dry and warm conditions across the country.
Financials
S&P 500 futures inched up 0.50% to $4,143.50 this morning thanks to lower energy prices and stabilizing bond yields. Another round of COVID lockdowns has settled over Shanghai, China, adding concern about demand after the city had previously began lifting lockdown restrictions last week.
The European Central Bank is likely to raise interest rates today, which could trigger trading losses. “Markets remain fixated on the risk that central banks intent on cooling inflation snuff out economic recoveries in the process,” Cecile Gutscher wrote in a Bloomberg report this morning.
“To rein in surging prices the Fed has to increase rates, which can result in a recession,” Geir Lode, head of global equities at Federated Hermes, wrote in a note. “However, the pandemic-induced supply-chain shock and the Ukraine conflict are beyond the central bank’s control. In this environment we need to be lucky to avoid stagflation that could last for a long time.”
What else I’m reading this morning on our website, FarmFutures.com:
My latest E-corn-omics column takes a look at potential wheat pricing opportunities at harvest for growers who may be battling production shortfalls this summer.
The White House nominated Doug McKalip to the USTR chief ag negotiator position. Jacqui Fatka has the latest on what farm country should know about McKalip.
Advance Trading’s Brett Mapel has six summer marketing tips for growers to consider in the coming months. Spoiler alert – sunscreen is necessary for both outdoor activities AND locking in 2023 profit margins.
Purdue’s Ag Economy Barometer readings for May showed a decrease in producer sentiment as production costs and inflationary pressures climbed.
Bryce Knorr points out that summer lows may be in for fuel and fertilizer – and encourages growers to consider locking in input prices for Fall 2022 harvest and the 2023 growing season.
Even though sales volumes slowed down relative to 2021, cropland prices are up 20% on the year, suggesting strong land demand isn’t going anywhere in 2022.
Morning Ag Commodity Prices – 6/9/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.665
7.58
7.62
-0.025
-0.33%
SEP ’22 CORN
$ / BSH
7.28
7.195
7.23
-0.0475
-0.65%
DEC ’22 CORN
$ / BSH
7.18
7.085
7.125
-0.0525
-0.73%
MAR ’23 CORN
$ / BSH
7.225
7.135
7.1725
-0.055
-0.76%
MAY ’23 CORN
$ / BSH
7.235
7.155
7.185
-0.055
-0.76%
JUL ’23 CORN
$ / BSH
7.2
7.105
7.145
-0.0525
-0.73%
SEP ’23 CORN
$ / BSH
6.6725
6.595
6.6175
-0.055
-0.82%
JUL ’22 SOYBEANS
$ / BSH
17.46
17.285
17.3325
-0.0675
-0.39%
AUG ’22 SOYBEANS
$ / BSH
16.65
16.495
16.54
-0.0875
-0.53%
SEP ’22 SOYBEANS
$ / BSH
15.8925
15.74
15.795
-0.09
-0.57%
NOV ’22 SOYBEANS
$ / BSH
15.6925
15.53
15.58
-0.1
-0.64%
JAN ’23 SOYBEANS
$ / BSH
15.725
15.5725
15.6175
-0.1025
-0.65%
MAR ’23 SOYBEANS
$ / BSH
15.6
15.45
15.4925
-0.105
-0.67%
MAY ’23 SOYBEANS
$ / BSH
15.565
15.4125
15.46
-0.1
-0.64%
JUL ’23 SOYBEANS
$ / BSH
15.505
15.42
15.42
-0.0975
-0.63%
AUG ’23 SOYBEANS
$ / BSH
15.2075
15.2075
15.2075
-0.0525
-0.34%
JUL ’22 SOYBEAN OIL
$ / LB
83.21
81.45
81.64
-1.3
-1.57%
AUG ’22 SOYBEAN OIL
$ / LB
81.09
79.46
79.64
-1.32
-1.63%
JUL ’22 SOY MEAL
$ / TON
418
413.5
416.4
0.8
0.19%
AUG ’22 SOY MEAL
$ / TON
408.4
405.9
408
0.3
0.07%
SEP ’22 SOY MEAL
$ / TON
402
399.4
401.3
0.2
0.05%
OCT ’22 SOY MEAL
$ / TON
395.9
393.4
394.3
-1
-0.25%
DEC ’22 SOY MEAL
$ / TON
397.5
394.5
396.3
-0.4
-0.10%
JUL ’22 Chicago SRW
$ / BSH
10.82
10.535
10.555
-0.1925
-1.79%
SEP ’22 Chicago SRW
$ / BSH
10.96
10.675
10.695
-0.1875
-1.72%
DEC ’22 Chicago SRW
$ / BSH
11.0875
10.81
10.8325
-0.185
-1.68%
MAR ’23 Chicago SRW
$ / BSH
11.1875
10.92
10.9475
-0.1825
-1.64%
MAY ’23 Chicago SRW
$ / BSH
11.24
10.9825
11.015
-0.17
-1.52%
JUL ’22 Kansas City HRW
$ / BSH
11.635
11.385
11.4
-0.15
-1.30%
SEP ’22 Kansas City HRW
$ / BSH
11.71
11.455
11.4725
-0.15
-1.29%
DEC ’22 Kansas City HRW
$ / BSH
11.8025
11.56
11.5825
-0.14
-1.19%
MAR ’23 Kansas City HRW
$ / BSH
11.8525
11.63
11.66
-0.1275
-1.08%
MAY ’23 Kansas City HRW
$ / BSH
11.6125
11.6125
11.6125
-0.14
-1.19%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.37
12.215
12.2625
-0.0825
-0.67%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.3525
12.21
12.2625
-0.075
-0.61%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.3275
12.1925
12.23
-0.0925
-0.75%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.3325
12.225
12.225
-0.125
-1.01%
MAY ’23 MLPS Spring Wheat
$ / BSH
12.2575
12.2
12.2
-0.1025
-0.83%
JUN ’21 ICE Dollar Index
$
102.68
102.09
102.265
-0.281
-0.27%
JU ’21 Light Crude
$ / BBL
122.72
121.33
121.79
-0.32
-0.26%
AU ’21 Light Crude
$ / BBL
120.4
119.07
119.45
-0.33
-0.28%
JUL ’22 ULS Diesel
$ /U GAL
4.3393
4.2529
4.331
0.0167
0.39%
AUG ’22 ULS Diesel
$ /U GAL
4.2461
4.1633
4.2397
0.0199
0.47%
JUL ’22 Gasoline
$ /U GAL
4.2431
4.172
4.2323
0.0104
0.25%
AUG ’22 Gasoline
$ /U GAL
4.0531
3.9948
4.0448
0.0023
0.06%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
175.65
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
177.25
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
136.825
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
137.525
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
107.85
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
107.95
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.32
#N/A
24.3
0
0.00%
JUL ’22 Class III Milk
$ / CWT
25.01
25.01
25.01
0
0.00%
AUG ’22 Class III Milk
$ / CWT
24.81
#N/A
24.9
0
0.00%
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