Afternoon report: Wheat prices continue to push higher in Wednesday’s session
Grain prices were mixed again in midweek trading after some uneven technical maneuvering today. Corn and soybean prices each fell around 1.5% lower on a round of technical selling partly spurred by yesterday’s selloff on Wall St., coupled with a looming rail workers strike that could begin later this week. Wheat stayed firm, in contrast, with most contracts up around 1% to 1.5%.
More wet weather will be moving into the Plains and upper Midwest between Thursday and Sunday, while areas farther south and west will see little to no measurable moisture during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts widespread seasonally dry conditions returning to the Midwest and Plains between September 21 and September 27, with warmer-than-normal conditions also likely.
On Wall St., the Dow eased 63 points lower to 31,041 after tumbling more than 1,200 points lower yesterday. Investors remain on edge about high inflation trends and what that may mean in terms of rising interest rates moving forward. Energy futures were mixed again today. Crude oil was up 1.25% this afternoon to $88 per barrel. Gasoline trended 1.75% higher, while diesel dropped nearly 4.5% lower. The U.S. Dollar softened moderately.
On Tuesday, commodity funds were net buyers of soyoil (+1,500) and CBOT wheat (+1,000) contracts but were net sellers of corn (-4,000), soybeans (-4,500) and soymeal (-4,500).
Corn
Corn prices were down again yesterday as traders continue to assess yesterday’s selloff on Wall St. and the prospects of a rail workers strike. The pinch of harvest pressure is also helping to suppress prices right now. December futures spilled 1.5% lower, losing 10.5 cents by the close to $6.8225.
Corn basis bids were steady to weak after crumbling 8 to 65 cents lower across five Midwestern locations on Wednesday.
Norfolk Southern Corp. announced it plans to cancel train shipments of bulk commodities on Thursday as it hedges its bets against a looming rail worker strike that could begin on Friday if negotiations are not successful. A significant amount of grain is shipped via rail each year, including 635,000 carloads of corn and 321,000 carloads of wheat. “The parties are negotiating in good faith and have committed to staying at the table today,” according to a Labor Department spokesperson today.
Ethanol production declined moderately, with a daily average of 963,000 barrels for the week ending September 9. It was also the fifth consecutive week that production failed to reach the 1-million-barrel-per-day benchmark. It was also the lowest weekly tally since late April.
Ahead of USDA’s next export report, out Thursday morning and covering the week through September 8, analysts think the agency will show new crop corn sales ranging between 11.8 million and 35.4 million bushels. This marks the first full week of the 2022/23 marketing year.
Per the latest data from the European Commission, 2022/23 EU corn imports are trending 63% above last year’s pace so far, with 202.4 million bushels.
Taiwan purchased 2.6 million bushels of animal feed corn, likely sourced from Brazil, in an international tender that closed earlier today. The grain is for shipment in November.
Preliminary volume estimates were for 154,164 contracts, falling moderately below Tuesday’s final count of 220,997.
Soybeans
Soybean prices followed corn prices lower on Wednesday, suffering a double-digit setback for the second consecutive session today. September futures tumbled 30.5 cents to $15.0375, with November futures down 20.75 cents to $14.58.
Soybean basis bids were steady to weak, tumbling as much as 70 cents lower at an Indiana processor and falling 1 to 30 cents lower at four other Midwestern locations on Wednesday.
Prior to Thursday morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 11.0 million and 36.7 million bushels for the week ending September 8. Analysts also expect to see up to 375,000 metric tons of soymeal sales and up to 35,000 MT of soyoil sales.
Ahead of the next monthly National Oilseed Processors Association (NOPA) report, out tomorrow morning, analysts think the group will show an August soybean crush totaling 166.110 million bushels. If realized, it will be 2.4% below July’s total but 4.6% above August 2021 totals and would be the second-biggest August crush on record.
How do your farm’s crop conditions stack up against other operations in the U.S.? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can peer anecdotes from around the country.
When it comes to timing grain sales this fall, it’s a good idea to stick to your marketing plan, advises Cat Sullivan, ag risk management advisor with Advance Trading. “Acting on hunches and guesses could prove to be one of the biggest errors you can make,” she notes. “Second to that could be the act of doing nothing regardless of the outcome of those hunches and guesses.” Sullivan took a closer look at some of the biggest factors that are in play in yesterday’s Ag Marketing IQ blog – click here to learn more.
European Union 2022/23 soybean imports reached 86.7 million bushels through September 11, which is slightly below last year’s pace so far. EU soymeal imports are also down slightly year-over-year, with 3.04 million metric tons over the same period.
Preliminary volume estimates were for 174,080 contracts, tracking moderately below Tuesday’s final count of 233,349.
Wheat
Wheat prices traded higher again on Wednesday as the focus remains on Ukraine’s ongoing production and export challenges, which should keep global supplies relatively tight. December Chicago SRW futures gained 12.25 cents to $8.7275, December Kansas City HRW futures rose 14 cents to $9.4775, and December MGEX spring wheat futures added 8.5 cents to $9.3975.
Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 20.2 million bushels for the week ending September 8.
StatsCan released its latest round of crop data earlier today and expects Canadian wheat production to rebound 55.6% higher in 2022 to 1.275 billion bushels. (Canada battled widespread drought in 2021.) Canada’s oats (+65.7%) and barley (+35.5%) outputs are also expected to rise sharply year-over-year.
Refinitiv Commodities Research decreased its estimates for 2022/23 Australian wheat production by around 1% after cooler-than-normal conditions may lead to some freeze/frost damage. Overall conditions are good based on the latest satellite imagery of vegetation densities, however.
European Union’s 2022/23 soft wheat exports reached 277.0 million bushels through September 11, which is 5.6% above last year’s pace so far. EU barley exports are running significantly below last year’s pace, in contrast, with 89.6 million bushels since the beginning of July.
French farm office FranceAgriMer has decreased its forecast for 2022/23 soft wheat exports outside of the European Union by 11.0 million bushels, sliding to 367.4 million bushels. Exports have been off to a strong start this summer due to Black Sea disruptions but are expected to be curtailed later amid an expected record-breaking Russian production.
Ukraine recently recaptured a significant area in the northeastern and southern regions of the country. Because of that, a deputy agriculture minister reported today that they may increase their forecasts for planted acres of winter crops, including winter wheat, winter barley, canola and rye. Currently, Ukraine expects planted acres of winter crops to fall 35% this season due to the ongoing Russian invasion.
Preliminary volume estimates were for 55,659 CBOT contracts, shifting 29% below Tuesday’s final count of 78,561.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
661
709
0
22-Dec
692.75
681.5
682.25
-10.5
Soybeans
22-Sep
1506.25
1503.75
1503.75
-30.5
22-Nov
1489.5
1453.5
1455
-20.75
Soymeal $/ton
22-Oct
434.8
426
429.6
2.1
Soyoil cents/lb
22-Oct
69.71
67.05
67.14
-1.56
Wheat $/bushel
22-Sep
853.75
11
22-Dec
874.75
849.25
872.25
12.25
KC Wheat
22-Sep
963.5
954
961.5
17.5
22-Dec
951.75
928.75
947
14
MPLS Wheat
22-Sep
926
22-Dec
948
926
938
8.5
Live Cattle cents/lb
22-Oct
145.125
144.275
144.4
-0.4
Feeder Cattle cents/lb
22-Oct
181.9
179.8
181.5
0.975
Lean Hogs cents/lb
22-Dec
86.475
85.225
85.325
-0.375
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Oct
90.19
86.18
88.43
1.12
Diesel
22-Oct
3.5558
3.3256
3.3765
-0.1648
Unleaded Gasoline $/gallon
22-Oct
2.5645
2.4357
2.5286
0.0482
Natural Gas
22-Nov
9.292
8.376
9.123
0.789
U.S. Dollar Index
22-Sep
109.92
109.265
109.62
-0.189
Gold $/ounce
22-Oct
1706.8
1694.8
1701.8
-3.2
Copper
22-Sep
3.572
3.527
3.5435
-0.0375
Fertilizer Swaps
(as of 09/02)
DAP Tampa-index
820.0
0
DAP-New Orleans
833.9
18.19
Urea-New Orleans
766.1
82.67
Urea-Middle East
863.0
68.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
531.9
55.12
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