Grains succeed in bid to move higher

Afternoon report: Corn, soybeans and wheat all trend higher on Tuesday

Grain prices have been largely embattled in recent weeks but were low enough today to attract some technical buying amid some renewed hope that export sales will pick up after the holidays. Soybean prices saw the most upside, rising more than 1% higher, while corn trended around 0.75% higher. Wheat gains were variable, ranging from 0.1% to 0.6%.

A winter storm will dump snow and frigid temperatures across a large swath of the central U.S. later this week, with most areas north of I-10 likely to be affected in some capacity. A look at NOAA’s 72-hour cumulative precipitation map offers a clearer view of the storm’s footprint. NOAA’s 8-to-14-day outlook shows a probable return to above-average temperatures between December 27 and January 2, with wetter-than-normal conditions likely for most of the U.S. during this time.

On Wall St., the Dow tested gains of 117 points this afternoon, moving to 32,874. But overall sentiment isn’t very bullish as investors weigh worries such as high inflation, rising interest rates and the possibility of a near-future recession developing. Energy futures saw mild to moderate gains. Crude oil rose 1% to $75 per barrel, while gasoline climbed nearly 2% higher and diesel picked up 0.25%. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of soyoil (+4,000) contracts but were net sellers of corn (-3,000), soybeans (-10,000), soymeal (-10,000) and CBOT wheat (-3,000).

Corn

Corn prices trended moderately higher following some technical buying partly spurred by export optimism and spillover strength from other commodities. March futures added 4.75 cents to $6.52, with May futures up 4.5 cents to $6.5250.

Corn basis bids were steady to mixed across the central U.S. on Tuesday after moving as much as 4 cents higher at an Iowa ethanol plant and as much as 5 cents lower at an Iowa processor today.

Brazil’s Anec estimates that the country’s corn exports will reach 259.0 million bushels in December. That’s slightly below the group’s prior forecast issued a week ago.

European Union corn imports during the 2022/23 marketing year have reached 529.9 million bushels through December 18, per the latest data from the European Commission. That’s more than double last year’s pace so far.

The 2021 and 2022 seasons may end up being the best two-year stretch that some farms will ever see, notes Matt Bennett, commodity analyst with AgMarket.net. “One of the big problems with such hefty profit margins is how hard it becomes for producers to accept margins that are more meager in scope,” he adds. Bennett explored the situation in greater depth in a recent Ag Marketing IQ blog – click here to learn more.

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Preliminary volume estimates were for 136,473 contracts, shifting slightly above Monday’s final count of 126,424.

Soybeans

Soybean prices benefited from a round of technical buying that lifted prices more than 1% higher today. Traders are likely to closely monitor South American weather moving forward and will also get another round of export sales data to digest on Thursday morning. Today, January futures rose 17.25 cents to $14.78, with March futures up 15.75 cents to $14.7925.

Soybean basis bids tilted 4 cents higher at an Ohio elevator and 5 cents higher at an Indiana processor while holding steady elsewhere cross the central U.S. on Tuesday.

European Union soybean imports during the 2022/23 marketing year are trending moderately below last year’s pace so far after reaching 185.9 million bushels through December 18. EU soymeal imports are slightly down year-over-year, with 7.36 million metric tons during the same period.

Brazil’s Anec expects the country’s soybean exports to reach 64.3 million bushels in December, which is slightly below the group’s prior projection made a week earlier. Anec also anticipates Brazilian soymeal exports will reach 1.523 million metric tons this month.

Chinese soybean imports from the United States in November were down 6.9% year-over-year, with 124.2 million bushels, according to newly available customs data. Sales from the U.S. through the first 11 months of 2022 reached 845.5 million bushels, a year-over-year decline of more than 12%.

Interested in learning more about South American production and what it might mean for your bottom line in 2023? Farm Progress is offering a special session featuring Cesar Cruz, director of research with Advance Trading on December 22. Additional sessions this week will cover diesel trends and maximizing winter shop time. Click here to learn more about this free, seasonal content.

If you have major asset purchases coming up, it’s time to carefully consider how those purchases will affect your bottom line and breakeven numbers for 2023, according to Darren Frye, CEO of Water Street Solutions. “Make sure that they make sense from an overall business perspective,” he recommends. “Otherwise, it’s often easy to make decisions based more on an instinct or emotion rather than the numbers. Frye serves up additional advice in his latest Finance First column – click here to learn more.

Preliminary volume estimates were for 202,041 contracts, tracking slightly higher than Monday’s final count of 193,978.

Wheat

Wheat prices followed other commodities higher on some modest technical buying on Tuesday. March Chicago SRW futures picked up 1.25 cents to $7.4975, March Kansas City HRW futures added 2.5 cents to $8.46, and March MGEX spring wheat futures gained 5.5 cents to $9.1375.

European Union soft wheat exports during the 2022/23 marketing year are trending moderately above last year’s pace so far after reaching 576.9 million bushels through December 18. In contrast, EU barley exports are sharply lower this season, with 127.7 million bushels during the same period.

Japan issued a regular tender to purchase 5.3 million bushels of food-quality wheat from the United States and Canada that closes on Thursday. Of the total, 58% is expected to be sourced from the U.S. The grain is for shipment starting in mid-January.

Taiwan issued an international tender to purchase 2.1 million bushels of grade 1 milling wheat from the United States that closes on Thursday. The grain is for shipment in February and seeks a blend of dark northern spring, hard red winter and white wheat.

Preliminary volume estimates were for 57,477 CBOT contracts, which was slightly below Monday’s final count of 61,006.

Settlement Prices for Key Commodities

High
Low
Last
Change
Corn $/bushel

23-Mar
654.25
646.75
652
4.75
23-May
654.75
647.5
652
4.75
Soybeans

23-Jan
1486.75
1460.25
1478.5
17.25
23-Mar
1487.5
1462.25
1479.75
15.75
Soymeal $/ton

23-Mar
454.3
446.1
449.3
2.5
Soyoil cents/lb

23-Mar
65.22
62.75
64.81
1.34
Wheat $/bushel

23-Mar
761.5
744.75
750.5
1.25
23-May
768.75
753
757.5
0.25
KC Wheat

23-Mar
859.5
842.75
847
2.5
23-May
852.5
836.75
840.75
2.5
MPLS Wheat

23-Mar
922
910
916
5.5
23-May
913.5
904.75
908.5
5.5
Live Cattle cents/lb

22-Dec
155.4
154.8
154.975
-0.3
Feeder Cattle cents/lb

23-Mar
185.325
182.875
185
1.2
Lean Hogs cents/lb

23-Apr
93.175
91.925
92.1
-0.9
Crude Oil $/barrel
*Energy prices may not represent final settlements
23-Jan
76.75
74.31
76.02
0.83
Diesel

23-Jan
3.1042
2.9984
3.0533
-0.0002
Unleaded Gasoline $/gallon

23-Jan
2.2339
2.1594
2.2167
0.0391
Natural Gas

23-Feb
5.765
5.167
5.267
-0.443
U.S. Dollar Index

22-Dec
104.415
103.4
103.635
-0.709
Gold $/ounce

23-Jan
1824.3
1789.6
1818.2
30.5
Copper

22-Dec
3.8055
3.725
3.8055
0.0225
Fertilizer Swaps

(as of 12/16)

DAP Tampa-index

692.0
0
DAP-New Orleans

705.5
75.48
Urea-New Orleans

515.9
3.38
Urea-Middle East

562.5
6
Urea-Black Sea

585.0
35
UAN (32%) New Orleans

589.7
54.74

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