Afternoon report: Corn, soybeans and wheat all make solid inroads in Friday’s session
Variable rains will land across the Midwest over the next several days, but midrange forecasts suggest more seasonally dry weather is ahead. That, along with general demand optimism, was enough to prompt another round of technical buying on Friday that helped grain prices move significantly higher. Corn prices rose around 2% higher, while nearby soybean contracts jumped more than 3.5% higher. Wheat gains ranged between 2% and 2.75% today.
Rainy weather is likely across most of the Corn Belt between Saturday and Tuesday – particularly in Iowa, where large parts of the state could gather 1.5″ or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally dry conditions for the northern third of the country between September 2 and September 8, with warmer-than-normal conditions spreading across the Plains, western Corn Belt and upper Midwest.
On Wall St., the Dow crumbled 732 points lower in afternoon trading to 32,558 on new indications that the Federal Reserve will continue to aggressively battle inflation by raising interest rates. Energy futures were mostly higher this afternoon. Crude oil tested modest gains of around 0.25%, hovering just below $93 per barrel. Diesel and gasoline each trended around 1.25% higher. The U.S. Dollar firmed moderately.
On Thursday, commodity funds were net sellers of corn (-5,000), soybeans (-6,500), soymeal (-5,500) and CBOT wheat (-8,000) contracts, and funds were roughly net even trading soyoil contracts.
Corn
Corn prices turned higher on lingering concerns about U.S. production potential after forecasts hint at a return to seasonally hot, dry weather in early September. That triggered a round of technical buying that lifted prices around 2% higher today. September futures rose 12.75 cents to $6.7025, with December futures up 15 cents to $6.65.
Corn basis bids moved 10 cents higher at an Illinois processor and firmed 3 cents at an Illinois river terminal while holding steady elsewhere across the central U.S. on Friday.
Germany’s agriculture ministry expects the country’s 2022 corn production to tumble 21.5% lower from year-ago totals to 137.8 million bushels after facing multiple heatwaves and historically severe drought. Yesterday, the European Commission lowered its forecast for 2022/23 EU corn production by nearly 10% to 2.335 billion bushels.
French corn quality ratings are still in freefall, with 47% rated in good-to-excellent condition through August 22, per the country’s farm office FranceAgriMer. That’s another three-point week-over-week reduction and is now far below year-ago results, when 91% of the crop was rated good to excellent.
The Environmental Protection Agency is in the middle of a review of atrazine and recently extended its deadline for comments to October 7. “For nearly 60 years, atrazine has been a reliable and proven herbicide for effective and efficient sustainable farming practices,” notes Farm Futures policy editor Jacqui Fatka. “However, the use of atrazine is at stake, a product included in more than 90 herbicide products across the U.S., and one that is utilized on 75% of U.S. sorghum acres.” Fatka takes a closer look at the ongoing EPA review – click here for details.
In case you missed it, yesterday USDA launched an upgraded export sales reporting system called ESRMS 2.0. The rollout did not go smoothly, unfortunately, causing the agency to retract its latest set of grain export data and issue a statement explaining what happened. Click here to learn more.
Preliminary volume estimates were for 256,704 contracts, trending moderately below Thursday’s final count of 298,672.
Soybeans
Soybean prices posted solid gains after following other grains higher amid lingering concerns over U.S. production potential. September futures climbed 56.75 cents to $16.0925, with November futures up 33.5 cents to $14.6475.
Soybean basis bids sank 15 cents lower at an Ohio elevator and firmed 3 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S. on Friday.
Private exporters announced to USDA the sale of 5.4 million bushels of soybeans for delivery to unknown destinations during the 2022/23 marketing year, which began September 1.
China again plans to auction off another 18.4 million bushels of its imported soybean reserves on September 2. China has offered similarly sized auctions regularly throughout 2022 to boost local supplies and cool high prices.
Earlier this week, Brazil’s Conab reported that it expects to see a record-breaking soybean production during the 2022/23 season, climbing to an unprecedented 5.525 billion bushels. That’s due to an expected rebound in yields and a 3.5% increase in planted area, which could reach 104.773 million acres.
How does 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.
Preliminary volume estimates were for 148,794 contracts, shifting slightly below Thursday’s final count of 162,607.
Wheat
Wheat prices grabbed double-digit gains on a round of technical buying partly spurred by a sluggish start to Ukrainian grain exports and widespread drought throughout Europe. Spillover strength from corn and soybeans lent additional support. September Chicago SRW futures rose 20.25 cents to $7.90, September Kansas City HRW futures gained 19.75 cents to $8.8875, and September MGEX spring wheat futures added 18 cents to $9.0075.
Ukraine’s 2022 wheat harvest is now 98% complete, with a production of 690.8 million bushels so far, according to the latest data from the country’s agriculture ministry. That’s far below Ukraine’s 2021 wheat harvest, which came in at 1.183 billion bushels. Average yields this season are estimated at 60.7 bushels per acre.
If it’s been a while since you’ve visited FarmFutures.com, our Friday feature “7 ag stories you might have missed” is an easy way to catch up on the industry’s top headlines. The latest batch of content includes a sneak peek of the upcoming 2022 Farm Progress Show, a look at the latest fertilizer price trends and more. Click here to get started.
Preliminary volume estimates were for 95,055 CBOT contracts, moving about 18% above Thursday’s final count of 80,531.
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