Morning report: Profit-takers swoop into the wheat market. (Comments are updated by 7:30 a.m. Central Time.)
Corn mixed to 1-4 cents lower
Soybeans unchanged to up 6-8 cents; Soymeal down $1.40/ton; Soyoil up $0.96/lb
Chicago wheat down 1-2 cents; Kansas City wheat mixed; Minneapolis wheat mixed
*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(TM) MyMap, so farmers can see others’ responses from across the country – or even across the county!
Good morning! And Happy Friday! I hope you and yours have a restful and fun weekend ahead. At Farm Futures, we will be kicking off the weekend by releasing yield estimates for corn and soybean crops from our August 2022 reader survey. Keep an eye on our website, FarmFutures.com, for the results, which will be available this morning!
Corn
Corn prices edged $0.01-$0.04/bushel lower again this morning, with the nearby contracts hovering right at $6/bushel at last glance. Losses in the energy market and a stronger dollar limited gains for the corn complex in the overnight trading session, though U.S. weather concerns prevented further losses this morning.
Some bearish price pressure is afoot this morning from rising Ukrainian grain export volumes, though shipping paces are facing significant challenges in returning to “normal” levels that would help to reduce tight global supply dynamics in the grain and oilseed markets.
Ukraine loaded three cargo vessels carrying grain exports today, two more than were first loaded out following the U.N. and Turkish-brokered agreement between Russia and Ukraine that allows for safe naval passage of Ukrainian grain cargoes through the ongoing Russian naval blockade. The total corn on board all three vessels is believed to total 2.3 million bushels.
Plus, a Turkish carrier is set to arrive in Chornomorsk today to transport grain, the first inbound cargo vessel into Ukraine since Russia invaded Ukraine back in February. Ukrainian officials expressed desires overnight for higher shipping volumes.
It’s likely many global grains buyers agree with that sentiment. The current shipping pace is likely too slow to ease the growing supply pressures faced by Ukrainian agricultural markets as well as hungry global buyers. But the advantage to that is for U.S. growers – as long as Ukrainian shipping volumes remain stunted, futures prices are less likely to significantly decrease over the coming weeks.
Soybeans
Soybean futures wavered between gains and losses this morning, with prices unchanged to $0.06-$0.08/bushel higher at last glance on looming weather concerns for the U.S. crop. The extended forecast is trending hotter and dryer for the Heartland during the middle of August, which will likely be the peak point at which soybean crops will be filling pods – ultimately determining final 2022 soybean yields. Some residual optimism held steady following yesterday’s bullish monthly export report for U.S. soybean paces in June 2022 as well.
Admittedly, I did not get a chance to dig too deep into the U.S. Census Bureau’s latest release of export data yesterday. These are the figures most widely used by USDA-World Ag Outlook Board members for calculating export estimates in the monthly WASDE reports.
Yesterday’s data release provided insights to June 2022 trade data. The key highlight was unseasonably high soybean export volumes, which soared nearly 2.5 times higher than year ago volumes to a staggering 83.4 million bushels. Those volumes are more typically seen at the tail end of peak export season in the late winter/early spring.
The value of those sales totaled out to $1.5 billion. Soybean export revenues a year ago in June 2021 only totaled $551 million, so yesterday’s data drop represents a massive shift in seasonal buying patterns.
Surprisingly, China was not the top buyer of this unseasonable soybean export boom. Rather, Mexico, Egypt, and Japan rounded out the top destinations for U.S. soybeans in June 2022. Soybean prices trended lower in June 2022, but the most actively traded September 2022 contract averaged approximately $16.0624/bushel through the much of June, suggesting that farmers had lucrative profit opportunities to sell soybeans into the export market at that time.
For more insights from yesterday’s monthly export sales report from the U.S. Census Bureau, I highly recommend checking out Reuter’s columnist Karen Braun’s latest insights on the data. Braun’s latest column examines the key highlights from yesterday’s data drop and also features a very intelligent analysis of Chinese buying patterns in 2022.
Wheat
Wheat futures fell $0.02-$0.06/bushel overnight as profit-takers likely settled into the wheat complex following yesterday’s gains. A stronger dollar limited the wheat complex’s gains even though global demand for wheat has been strong this week after the Chicago market hit a six-month low on Wednesday.
“Wheat prices are cheap, given the current tight supply situation, and we see strong demand coming from key importers,” one Singapore-based trader told Reuters last night.
Russia’s agriculture ministry suggested overnight that weather factors and lack of access to equipment and parts for foreign farm machinery could lead the country to fall short on its expected 2022 grain harvest target of 130 million metric tonnes (MMT).
Russia’s wheat crop is expected to total 3.2 billion bushels (87 MMT) this year. USDA’s forecasts are more conservative on that estimate. This latest news update could reduce some of the liquidity on the global grain market in the coming months, though Russia seems to be continuing to ship its grain reserves at steady volumes despite ongoing economic sanctions in place due to the Black Sea conflict.
Argentina’s wheat crop has received beneficial rains over the past week, according to the Buenos Aires Grains Exchange. The precipitation accumulation has helped to ease drought conditions in the South American country, which was expected to increase its wheat production earlier this year before drought conditions thwarted planting activities.
The Exchange had originally forecasted that Argentine wheat farmers would plant 16.3 million acres of wheat at the beginning of the summer. Now, that estimate has been revised nearly 8% lower to 15.1 million acres.
Crop progress has struggled amid the persistently dry conditions, the Exchange noted. It warned that the dry weather – triggered by another bout of La Ni?a-induced weather patterns – could continue to degrade yield prospects for Argentine crops this year and that “if this scenario is not reversed, they could be compromised when critical stages (of development) begin.”
Even though Argentina’s wheat expansion fell short this year, the country expects that 81.4% of its cropland for grain will be planted to corn this year.
Weather
It’s going to be another hot day across the entire U.S. Heartland today, according to NOAA’s short-range forecasts. It will be dry again today in the Upper Midwest, while the Eastern Corn Belt and the Southeast see another round of thunderstorms and showers.
That region can expect to see up to an inch of precipitation accumulation over the next 24 hours. Storm systems developing in the Central Rockies today will push into the Upper Midwest overnight, providing a strong chance of beneficial rain showers for the Upper Midwest from early tomorrow morning through Sunday evening, which could bring relief to soybean plants in peak reproductive phases.
Above average temperatures continue to plague NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday. The persistent dryness in the Heartland is expected to continue through the first half of August. These extended forecasts are increasing hot and dry, which is exacerbating price pressure on the corn and soybean markets.
Financials
The U.N.’s Food and Agriculture Organization (FAO) released monthly world food price data overnight, noting that prices eased back from the March 2022 record high, though still persisted at high levels for consumers.
In July 2022, global food prices remained 13.1% higher than a year ago, as tight global supplies, rising freight costs, and the Black Sea conflict continue to exacerbate a high price environment around the world.
“The decline in food commodity prices from very high levels is welcome, however, many uncertainties remain,” said FAO Chief Economist Maximo Torero.
S&P 500 futures inched 0.04% higher to $4,153.75. Traders are bracing for today’s monthly jobs report. Yesterday’s weekly unemployment data showed some signs that the labor market is beginning to cool off (which would incentivize the Federal Reserve to slow down its pace on interest rate hikes), but economists are skeptical that today’s results are going to show the same sentiments.
Energy market losses also contributed to the lackluster stock performance this morning, while also weighing on the commodities market.
What else I’m reading this morning on our website, FarmFutures.com:
AgMarket.Net’s Brian Splitt examines historical outcomes of USDA’s August yield reports and how farmers can prepare their marketing plans ahead of the reports.
Advance Trading’s Brian Basting explores the accuracy of USDA’s August yield estimates vs. final harvest estimates published in January 2023.
Here are the top highlights from yesterday’s weekly Crop Progress report from USDA.
Bryce Knorr explains how the weather, dollar, and technical signs could point to an early summer bottom for grain prices.
Darren Frye offers three tips to help farm owners lead others through change.
KCoe Isom’s Davon Cook walks farmers though the lifecycle of a family business to help growers manage growth and make better decisions.
Morning Ag Commodity Prices – 8/5/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.0875
5.97
6.0075
-0.015
-0.25%
DEC ’22 CORN
$ / BSH
6.1275
6.005
6.0475
-0.015
-0.25%
MAR ’23 CORN
$ / BSH
6.205
6.0825
6.125
-0.0175
-0.28%
MAY ’23 CORN
$ / BSH
6.25
6.1275
6.17
-0.0175
-0.28%
JUL ’23 CORN
$ / BSH
6.26
6.1375
6.1725
-0.0225
-0.36%
SEP ’23 CORN
$ / BSH
5.9325
5.8325
5.8325
-0.0425
-0.72%
DEC ’23 CORN
$ / BSH
5.8225
5.7125
5.73
-0.035
-0.61%
AR2 ’24 CORN
$ / BSH
5.8975
5.85
5.8975
0.0575
0.98%
MAY ’24 CORN
$ / BSH
0
#N/A
5.88
0
0.00%
AUG ’22 SOYBEANS
$ / BSH
16.2475
16.2475
16.2475
0.0975
0.60%
SEP ’22 SOYBEANS
$ / BSH
14.7775
14.56
14.6125
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
14.2875
14.0625
14.11
-0.0675
-0.48%
JAN ’23 SOYBEANS
$ / BSH
14.36
14.1425
14.19
-0.065
-0.46%
MAR ’23 SOYBEANS
$ / BSH
14.35
14.14
14.175
-0.08
-0.56%
MAY ’23 SOYBEANS
$ / BSH
14.3525
14.1425
14.1775
-0.085
-0.60%
JUL ’23 SOYBEANS
$ / BSH
14.315
14.1075
14.1175
-0.115
-0.81%
AUG ’23 SOYBEANS
$ / BSH
14.045
14.0375
14.04
0.0725
0.52%
SEP ’23 SOYBEANS
$ / BSH
12
#N/A
13.4625
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.31
13.1575
13.1675
-0.0925
-0.70%
AN2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.2925
0
0.00%
AUG ’22 SOYBEAN OIL
$ / LB
67
67
67
0.96
1.45%
SEP ’22 SOYBEAN OIL
$ / LB
63.72
62.03
63.03
0.58
0.93%
AUG ’22 SOY MEAL
$ / TON
516.3
516.3
516.3
2.6
0.51%
SEP ’22 SOY MEAL
$ / TON
454
449.5
450.8
-2.7
-0.60%
OCT ’22 SOY MEAL
$ / TON
424.5
419.2
420.2
-3.3
-0.78%
DEC ’22 SOY MEAL
$ / TON
421.9
416.1
417.5
-3.2
-0.76%
JAN ’23 SOY MEAL
$ / TON
418.9
412.7
414
-3.6
-0.86%
SEP ’22 Chicago SRW
$ / BSH
7.9675
7.7175
7.785
-0.04
-0.51%
DEC ’22 Chicago SRW
$ / BSH
8.1625
7.915
7.9825
-0.0375
-0.47%
MAR ’23 Chicago SRW
$ / BSH
8.3625
8.1025
8.16
-0.045
-0.55%
MAY ’23 Chicago SRW
$ / BSH
8.4425
8.2075
8.2575
-0.05
-0.60%
JUL ’23 Chicago SRW
$ / BSH
8.41
8.1875
8.2375
-0.045
-0.54%
SEP ’23 Chicago SRW
$ / BSH
8.42
8.2125
8.27
-0.025
-0.30%
DEC ’23 Chicago SRW
$ / BSH
8.4425
8.2425
8.3075
-0.025
-0.30%
SEP ’22 Kansas City HRW
$ / BSH
8.7725
8.5175
8.58
-0.0225
-0.26%
DEC ’22 Kansas City HRW
$ / BSH
8.8475
8.595
8.65
-0.03
-0.35%
MAR ’23 Kansas City HRW
$ / BSH
8.9075
8.6775
8.6775
-0.0625
-0.72%
MAY ’23 Kansas City HRW
$ / BSH
8.925
8.6975
8.705
-0.0575
-0.66%
JUL ’23 Kansas City HRW
$ / BSH
8.82
8.5925
8.5925
-0.08
-0.92%
SEP ’23 Kansas City HRW
$ / BSH
8.61
8.595
8.61
-0.025
-0.29%
DEC ’23 Kansas City HRW
$ / BSH
8.62
8.5925
8.5925
-0.045
-0.52%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.06
8.8875
8.92
-0.0225
-0.25%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.2025
9.045
9.0675
-0.02
-0.22%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.3425
9.2
9.205
-0.015
-0.16%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.405
9.2975
9.3475
0.04
0.43%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.4175
#N/A
9.38
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.15
9.15
9.15
-0.0075
-0.08%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
9.2125
0
0.00%
SEP ’21 ICE Dollar Index
$
105.885
105.58
105.735
0.169
0.16%
SE ’21 Light Crude
$ / BBL
89.42
87.68
88.22
-0.32
-0.36%
OC ’21 Light Crude
$ / BBL
88.42
86.71
87.22
-0.34
-0.39%
SEP ’22 ULS Diesel
$ /U GAL
3.329
3.2074
3.2297
-0.1075
-3.22%
OCT ’22 ULS Diesel
$ /U GAL
3.2876
3.1755
3.1945
-0.1047
-3.17%
SEP ’22 Gasoline
$ /U GAL
2.8097
2.7636
2.7914
-0.0021
-0.08%
OCT ’22 Gasoline
$ /U GAL
2.5742
2.5417
2.5545
-0.0086
-0.34%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
179.075
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
182.575
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
137.7
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
143.65
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
120.65
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
97.6
0
0.00%
AUG ’22 Class III Milk
$ / CWT
19.91
19.87
19.87
-0.07
-0.35%
SEP ’22 Class III Milk
$ / CWT
19.55
19.17
19.17
-0.31
-1.59%
OCT ’22 Class III Milk
$ / CWT
19.91
19.91
19.91
-0.15
-0.75%
