Afternoon report: Corn and soybeans track lower, while wheat makes moderate inroads
Grain prices were mixed to start the week after some uneven technical maneuvering on Monday. Wheat contracts were the biggest benefactors after grabbing variable gains that ranged between 0.5% and 1.75%. Corn tested gains briefly this morning but ultimately settled back into the red by the close. And soybeans dropped nearly 1% on lingering Chinese demand concerns.
Most areas east of the Mississippi River will see at least some measurable rain or snow between Tuesday and Friday, but few areas will receive substantial amounts during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts mostly seasonally dry conditions for the Corn Belt between November 21 and November 27, with prevalent cooler-than-normal conditions likely for the central U.S. next week.
On Wall St., the Dow improved 142 points this afternoon to reach 33,890, anchored by gains in the health sector. Energy futures faced big cuts on concerns over rising covid cases in China. Crude oil fell 3.25% to $86 per barrel this afternoon. Gasoline dropped 3%, while diesel faded 0.75% lower. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of all major grain contracts, including corn (+3,000), soybeans (+8,500), soymeal (+1,500), soyoil (+3,500) and CBOT wheat (+3,500).
Corn
Corn prices spilled slightly lower in Monday’s session on some net technical selling, although a solid round of export inspection data helped limit losses, and seasonal pressures are beginning to subside with the 2022 harvest nearly in the books. December futures eased 0.75 cents to $6.5725, with March futures down 4 cents to $6.59.
Corn basis bids were steady to firm after rising 11 cents higher at an Ohio elevator and improving 10 to 15 cents at two Midwestern processors on Monday.
Corn export inspections for the week ending November 10 more than doubled the prior week’s tally, moving to 19.1 million bushels. That was also on the high end of trade estimates, which ranged between 7.8 million and 19.7 million bushels. China was the No. 1 destination, with 8.1 million bushels. Cumulative totals for the 2022/23 marketing year are still running moderately behind last year’s pace, with 194.2 million bushels.
Prior to USDA’s next crop progress report, out later Monday afternoon and covering the week through November 13, analysts expect to see corn harvest progressing from 87% complete a week ago to 93% complete as of Sunday. Individual trade guesses ranged between 92% and 94%.
Seventy percent of Brazil’s first corn crop has been planted so far, according to the country’s AgRural consultancy. That’s up from 63% a week ago but well below 2021’s pace of 85%. “The slower pace is mainly due to the irregularity of the rains in the southeast of the country and in Goi?s,” according to AgRural.
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Preliminary volume estimates were for 341,074 contracts, trending moderately below Friday’s final count of 432,986.
Soybeans
Soybean prices suffered a moderate technical setback, even following another robust round of export inspection data this morning. The prevailing concern at the moment is whether Chinese covid lockdowns will cause a drop in demand for the world’s No. 1 soybean buyer. November futures fell 13.75 cents to $14.4175, with January futures down 8 cents to $14.42.
Soybean basis bids were mostly steady across the central U.S. on Monday but did firm 4 cents at an Ohio elevator today.
Soybean export inspections were robust again last week, reaching 89.4 million bushels. That was toward the higher end of trade estimates, which ranged between 73.5 million and 97.4 million bushels. China accounted for just over half of that total, with 46.8 million bushels. Cumulative totals for the 2022/23 marketing year are still tracking below last year’s pace so far, with 539.8 million bushels.
Ahead of the next USDA crop progress report, analysts think the agency will show the 2022 soybean harvest move from 94% a week ago to 97% through Sunday. Individual trade guesses ranged between 96% and 98%.
Grain prices are benefactors of recent inflation trends – and they were also part of the cause, according to grain market analyst Bryce Knorr. “But beyond the chicken-or-egg debate, it’s easy to worry that lower consumer prices could become a long-term bearish factor for ag markets. How worried should you be?” he adds. Knorr explores the situation in greater detail in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 131,990 CBOT contracts, sliding moderately below Friday’s final count of 205,805.
Wheat
Wheat prices were firm as traders continue to review the latest matrix of production and export challenges both in the U.S. and abroad. December Chicago SRW futures added 4.75 cents to $8.1850, December Kansas City HRW futures rose 12.5 cents to $9.56, and December MGEX spring wheat futures climbed 17.5 cents to $9.6325.
Wheat export inspections were lackluster after only reaching 2.8 million bushels last week. That was below the entire range of trade guesses, which came in between 3.7 million and 18.4 million bushels. The Philippines topped all destinations, with 1.5 million bushels. Cumulative totals for the 2022/23 marketing year are slightly below last year’s pace, with 364.0 million bushels.
Prior to today’s crop progress report from USDA, analysts expect the agency to show winter wheat plantings move from 92% a week ago to 96% through Sunday. Analysts also think USDA will bump up quality ratings by a point, with 31% of the crop in good-to-excellent conditions through November 13.
Ukraine’s 2022/23 grain exports are down more than 30% year-over-year so far as the Russian invasion drags on. Exports since the beginning of July include 209.4 million bushels of wheat sales, 318.9 million bushels of corn sales and 55.1 million bushels of barley sales. Ukraine is among the world’s top exporters of each of those three commodities.
Meantime, Russian officials indicated earlier today that negotiations held with the United Nations last week were “fairly constructive” regarding an extension of a current deal that allows safe passage for Ukrainian cargo ships in the Black Sea. The current deal is set to expire in November 19 but will be extended as long as no party objects to its current conditions.
Russia’s Sovecon consultancy expects the country’s wheat exports to reach 161.7 million bushels in November. That would be slightly above October’s total of 158.0 million bushels and the highest monthly tally in more than a year, if realized.
Saudi Arabia’s state grains buyer reported that it had purchased 37.1 million bushels of wheat from optional origins in an international tender that recently closed. Offers included grain sourced from Europe, the Black Sea region, North America, South America and Australia. The grain is for arrival between April and June.
French farm office FranceAgriMer reported that 92% of the country’s 2022/23 soft wheat crop had been planted through November 7. Emergence reached 76%, putting this season’s crop maturity six day ahead of the prior five-year average so far.
Iraq purchased 7.3 million bushels of wheat sourced from the United States via direct purchases as part of its plan to shore up its strategic reserves. Additional details of the sale were not immediately available.
Preliminary volume estimates were for 98,515 CBOT contracts, which was moderately below Friday’s final count of 132,767.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Dec
662
652.25
657.25
-0.75
23-Mar
664.5
657
659.25
-4
Soybeans
22-Nov
1460
1435.75
1441.75
-13.75
23-Jan
1455.25
1434.25
1440.5
-8
Soymeal $/ton
23-Jan
407.3
400.6
402.2
-1.2
Soyoil cents/lb
23-Jan
74.8
73.25
73.88
-0.53
Wheat $/bushel
22-Dec
828.75
804.75
818.5
4.75
23-Mar
848
825.75
838.25
2.25
KC Wheat
22-Dec
965.75
942.75
956.25
12.5
23-Mar
959.5
937.25
949.75
10
MPLS Wheat
22-Dec
967
947.5
963
17.5
23-Mar
977.5
959
973.75
16.5
Live Cattle cents/lb
22-Oct
152.375
151.25
151.6
0.075
Feeder Cattle cents/lb
23-Jan
179.7
178.55
179.475
0.9
Lean Hogs cents/lb
23-Feb
89.975
88.25
89
0.6
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Dec
89.84
85.27
85.37
-3.59
Diesel
22-Dec
3.7037
3.5231
3.5634
0.0081
Unleaded Gasoline $/gallon
22-Dec
2.6586
2.52
2.5209
-0.0887
Natural Gas
23-Jan
6.742
6.26
6.38
0.117
U.S. Dollar Index
22-Dec
107.15
106.33
106.55
0.386
Gold $/ounce
22-Dec
1778.4
1755.8
1772.5
6.5
Copper
22-Nov
3.872
3.8365
3.864
-0.087
Fertilizer Swaps
(as of 11/11)
DAP Tampa-index
700.0
0
DAP-New Orleans
764.5
-26.46
Urea-New Orleans
583.1
-28.66
Urea-Middle East
587.5
-60
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
599.7
-14.88
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