Afternoon report: Wheat prices continued to fade lower in Wednesday’s session
Grain prices were mixed after some uneven technical maneuvering on Wednesday, as traders remained focused on weather forecasts and demand trends. Corn and soybeans incurred heavy losses earlier this week, which finally prompted some bargain buying today. Wheat prices suffered another setback, in contrast, with most contracts down at least 2% after a round of technical selling.
Between Thursday and Sunday, some parts of the Corn Belt will receive no measurable moisture, but large parts of Iowa, Minnesota and Wisconsin could gather another 1″ or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally cool, wet weather for most of the Midwest between August 24 and August 30.
On Wall St., the Dow is on track to post losses for the first time in six sessions, trending 56 points lower to 34,095 on word that the Federal Reserve is likely to continue making future interest rate hikes in its attempts to tamp down inflation. Energy futures saw moderate to significant gains today. Crude oil rose 1.5% this afternoon to $88 per barrel on lower domestic stocks. Diesel jumped 3.5% higher, with gasoline up around 1%. The U.S. Dollar firmed slightly.
On Tuesday, commodity funds were net sellers of all major grain contracts, including corn (-10,000), soybeans (-12,000), soymeal (-3,500), soyoil (-5,000) and CBOT wheat (-7,500).
Corn
Corn prices moved moderately higher on a technical bounce in a choppy session after fading lower earlier in the week. Traders are still carefully eyeing the latest weather forecasts and an uptick in grain leaving Ukrainian ports, however. September futures added 4.75 cents to $6.1575, with December futures firming 2 cents to $6.1225.
Corn basis bids were steady to mixed on Wednesday, moving as much as 20 cents lower at an Indiana elevator and as much as 14 cents higher at an Iowa river terminal today.
Ethanol production fell below the 1-million-barrel-per-day benchmark for the first time since mid-May, with a daily average of 983,000 barrels for the week ending August 12. Ethanol stocks moved 1% higher last week.
Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show corn sales ranging between 11.8 million and 43.3 million bushels for the week ending August 11.
Yesterday, President Joe Biden signed into law the Inflation Reduction Act. This legislation (among other things) will provide $19.5 billion in new conservation funding that supports climate-smart agriculture. “From climate-smart agriculture, to supporting healthy forests and conservation, to tax credits, to biofuels, infrastructure and beyond, the Inflation Reduction Act provides USDA with significant additional resources to continue to lead the charge,” according to Secretary of Agriculture Tom Vilsack. Farm Futures policy editor Jacqui Fatka offers additional reporting on the IRA – click here to learn more.
Turkey’s defense ministry reports that four additional ships have left Ukrainian ports. The cargo was comprised of several commodities, including corn, sunflower meal and sunflower oil.
Preliminary volume estimates were for 153,149 contracts, trending moderately below Tuesday’s final count of 205,505.
Soybeans
Soybean prices followed corn higher on some bargain buying after a choppy session on Wednesday. September futures rose 20.25 cents to $14.7450, with November futures up 9 cents to $13.90.
Soybean basis bids were mostly steady to firm after rising 5 to 30 cents higher at three Midwestern locations on Wednesday. An Indiana elevator bucked the overall trend after tumbling 45 cents lower.
Prior to Thursday morning’s export report from USDA, analysts expect the agency to show soybean sales ranging between 7.3 million and 34.9 million bushels for the week ending August 11. Analysts also expect to see soymeal sales ranging between 150,000 and 650,000 metric tons, plus up to 25,000 MT of soyoil sales.
In July, Japan imported a total of 7.8 million bushels of soybeans from the United States, which was a year-over-year increase of 23%. Total grain imports from the U.S. were 0.7% lower from year-ago results, however.
Plenty of production challenges exist across the central U.S. this season, but some farmers are still expecting bumper crops, according to the latest Feedback from the Field updates. “At this time, this is the best corn and soybean crop that we’ve ever had,” one northern Illinois farmer noted. “On the way to best crop ever, just a few days late,” according to another east-central Wisconsin grower. Click here to read more farmer anecdotes and find out how you can participate, too.
Yesterday, Egypt announced it had purchased 47,000 metric tons of soyoil in a local purchasing tender, per a statement from its supply ministry. Because of this, Egypt cancelled its latest two international tenders in favor of the lower-priced local oils.
Preliminary volume estimates were for 95,910 contracts, shifting moderately below Tuesday’s final count of 149,891.
Wheat
Wheat prices were back in the red on Wednesday as a recent flurry of ships leaving Ukrainian ports prompted a round of technical selling that left most contracts down 2% to 2.5% today. September Chicago SRW futures lost 23 cents to $7.63, September Kansas City HRW futures fell 20.25 cents to $8.5150, and September MGEX spring wheat futures dropped 19.25 cents to $8.8350.
Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show wheat sales ranging between 9.2 million and 23.9 million bushels for the week ending August 11.
India slightly upped its wheat production estimates despite recent overly hot conditions in the country. India’s farm ministry now expects production to reach 3.926 billion bushels this season. However, a Mumbai-based dealer is skeptical of this number, saying it’s “very difficult to believe” while offering an alternative estimate of only 3.527 billion bushels.
Bulgaria has virtually finished this season’s wheat harvest and is looking at an 11% smaller crop from last year’s record-breaking effort, with around 231.5 million bushels. Bulgaria is a significant wheat exporter in the Balkan region. Bulgaria’s barley production also trended around 11% lower year-over-year.
Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on September 1. The grain is for shipment 40 days after a contract is signed.
Preliminary volume estimates were for 70,847 CBOT contracts, which is slightly higher than Tuesday’s final count of 61,264.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
618.5
608
615
4.75
22-Dec
617
606.75
612
2
Soybeans
22-Sep
1479
1454
1475.25
20.25
22-Nov
1400
1379
1390
9
Soymeal $/ton
22-Oct
407.5
400.7
405.8
5.3
Soyoil cents/lb
22-Oct
67.22
65.8
66.07
-0.55
Wheat $/bushel
22-Sep
797
759.5
763.25
-23
22-Dec
813.75
777
780.5
-22.5
KC Wheat
22-Sep
885.25
841.25
851
-20.25
22-Dec
886.25
843
853
-19.75
MPLS Wheat
22-Sep
910.75
880.75
883.5
-19.25
22-Dec
921.5
891.5
894.25
-18
Live Cattle cents/lb
22-Aug
142
141.15
141.75
0.45
Feeder Cattle cents/lb
22-Sep
187.775
184.5
186.85
1.375
Lean Hogs cents/lb
22-Dec
88.65
86.7
88.5
0.8
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
89.16
85.88
87.98
1.45
Diesel
22-Sep
3.6213
3.4528
3.6063
0.1261
Unleaded Gasoline $/gallon
22-Sep
2.9532
2.8615
2.9255
0.0248
Natural Gas
22-Oct
9.65
9.1
9.148
-0.163
U.S. Dollar Index
22-Sep
106.795
106.18
106.41
0.022
Gold $/ounce
22-Sep
1781.7
1759
1767.8
-5.4
Copper
22-Aug
3.613
3.613
3.613
-0.0235
Fertilizer Swaps
(as of 08/12)
DAP Tampa-index
887.5
-25
DAP-New Orleans
829.5
-8.27
Urea-New Orleans
620.6
-40.79
Urea-Middle East
762.5
-2.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
440.9
1.1
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