Morning report: Reactions to extended weather forecasts, Chinese demand, and Russian production triggers a grain market selloff this morning. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 18-26 cents
Soybeans down 18-28 cents; Soymeal down $3.70/ton; Soyoil down $1.46/lb
Chicago wheat down 14-16 cents; Kansas City wheat down 17-18 cents; Minneapolis wheat down 12-15 cents
*Prices as of 7:00am CDT.
Good morning! Welcome back after the inaugural (government and market observed, anyway) Juneteenth holiday weekend – I hope you enjoyed it! The grain markets seem to be suffering a bit of a holiday hangover as prices across the board are trading lower this morning and there was little new information off of the newswires last night.
I spent the holiday back in Illinois going to a family wedding and my newest niece’s baptism. It was filled of all the normal things grain market analysts do on the weekends, including tea parties with my niece, dairy steer chores with my dad, taking my yellow lab nephew for a run (and roll in the mud…), Encanto sing-a-longs with all the littles, and teaching my toddler nephews all sorts of fun tricks their parents will appreciate!
I’m back in Colorado and ready to help my husband finish installing our irrigation system. Balance is so important!
Also, tough loss last night but still – Go Avs!
Feedback from the Field updates! It’s the busiest time of year across the Heartland as farmers finish up planting spring 2022 crops and begin crop protection activities over the next few weeks. While our FFTF responses have trended lower over the past week, we are still receiving valuable insights from farm country.
Check out our newest Feedback from the Field column for all of the latest insights straight from the fields!
I have recently updated our survey to reflect current growing conditions, so you can share updated crop progress from your area as often as you would like through the survey portal! Just click this link to take the survey and share updates about your farm’s spring progress. I review and upload results daily to the FFTF Google MyMap, so farmers can see others’ responses from across the country – or even across the county!
Corn
Lower Chinese corn imports during May 2022 compared to a year ago weighed heavily on U.S. corn futures this morning, dropping prices $0.18-$0.26/bushel on demand fears as the world’s largest corn buyer shows signs of easing demand.
Losses were somewhat capped by concerns about high temperatures across the Heartland through the rest of the month that could stunt crop development in a year which found lower expected planted corn acreage in the U.S. relative to last year.
Market watchers will be eager to see if last week’s heat wave is going to take a bite out of weekly corn condition ratings in today’s Crop Progress report from USDA.
In my travels across Eastern Iowa, Northwestern Illinois, and Southwest Wisconsin over the weekend, there were some uneven corn patches here and there, but largely the corn was already growing pretty rapidly in response to the heat and looked to be in pretty good condition.
Everything was greened up very nicely, though the crop and soil moisture level needs more rain in that part of the world. I heard anecdotal reports that crops further south in Illinois were beginning to roll as the mercury rose last week, so it will be interesting to see the reports of USDA’s condition ratings later this afternoon.
Condition ratings declined slightly on the week, falling 1% to 72% good to excellent as of June 12. But the crop is still in good shape in relative terms – a year ago, 68% of 2021 corn was rated in good to excellent condition.
Soybeans
Soybeans are on track for a two-day skid, as prices fell $0.20-$0.28/bushel overnight. Some hope for cooler weather in the extended forecasts helped ease concerns about delayed crop development due to the slow start this spring and the ongoing heat wave currently blistering the Heartland.
Soybean planting progress will likely only increase slightly in today’s Crop Progress report as much of the remaining acreage left to be planted is likely on double crop rotations that is waiting for winter wheat to be harvested.
The soybean crops I scouted over the weekend looked good. The late and frantic planting season meant that the crop was off to a slower start than corn this year, but that didn’t look to be holding any hopes for high yields back.
Last week’s report saw USDA’s first condition rating report on the young soybean crop for the 2022 growing season. As of last Sunday, USDA found 70% of anticipated 2022 soybean acres to be in good to excellent condition. A year ago, that value stood at 62% good to excellent.
Wheat
A higher Russian wheat crop forecast from Black Sea consultancy SovEcon this morning weighed wheat prices even lower, after harvest pressures from Europe and North America started the overnight session out on a bearish note.
Russia is now forecast to harvest 3.28 billion bushels of wheat – a 22-million-bushel increase from SovEcon’s last estimates thanks to improving spring wheat crop outlooks and better than expected winter wheat crop development. USDA currently forecasts the 2022/23 Russian wheat crop at 2.98 billion bushels – not quite the record highs predicted by SovEcon.
Some of the losses were offset by tenders issued by North African countries overnight, as buyers look to capitalize on 11-week price lows in the wheat market to secure supplies.
Winter wheat harvest will be the primary focus of today’s Crop Progress report for the wheat sector. Better than expected results will likely continue to drag prices down to 11-week lows, though slowed progress could help stem some of the morning’s losses – if they continue through today’s trading session.
But based on harvest progress reports from U.S. Wheat Associates, mostly clear skies in the Plains last week likely accelerated harvest progress in the region during that time. Last week’s Crop Progress report saw harvest progress slow behind historical benchmarks following untimely rains in the Southern Plains.
As of June 10, 10% of the crop had been harvested, up 5% from the previous week but 2% lower than the five-year average. Condition ratings improved 1% to 31% good to excellent as of last Sunday, but it likely matters little as the crop establishes maturity and is harvested.
Also – I have never seen so much winter wheat grown in Southwestern Wisconsin as I have this year! I also saw more scatterings of wheat fields in Eastern Iowa than I can ever recall, too. And it’s a beautiful crop, so I’ll be anxious to see how harvest results pan out for Wisconsin later this summer.
The crop looked to have mostly headed already, so it will be another week or so before it reaches peak maturation and will be ready to be combined. But it was a picturesque sight that I thoroughly enjoyed across my travels!
Weather
More heat is forecast for much of the Heartland today, according to NOAA’s short-range forecasts. Chances for a band of scattered showers will be possible along a shifting pressure front spanning from New Mexico to Wisconsin today. Any accumulation will likely be light over the next 24 hours, but Eastern Kansas and Northwestern Missouri could see up to an inch of accumulation during that time.
NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday are trending slightly cooler for the Heartland, with little hope for extra moisture.
Financials
Bargain buyers pushed up S&P 500 futures by 1.69%, lifting the index to $3,737.15 at last glance. Investors were re-evaluating the likelihood and duration of a potential recession, with a little less pessimism at play this morning after last week’s stock market selloff erased $2 trillion in value from the S&P 500. A strong European stock market showing overnight also lifted prospects in the U.S. this morning.
“Even if the mid-term investing landscape remains blurry to most market operators at the beginning of this summer season, some investors looking for opportunities to buy shares at a discounted price have been reassured,” Pierre Veyret, a technical analyst at ActivTrades, told Bloomberg this morning.
“The fact central banks are moving quickly towards a super hawkish stance in order to tame inflation is also perceived as good news by some.”
Recession warnings from investment banks Morgan Stanley and Goldman Sachs and investor Elon Musk overnight kept fears of an economic downturn fully alive this morning, though.
“The bear market will not be over until recession arrives or the risk of one is extinguished,” a group of Morgan Stanley analysts said in a note last week after the S&P 500 fell 20% below its January 2022 record highs.
The same group of analysts predicts that “the S&P 500 Index needs to drop another 15% to 20% to about 3,000 points for the market to fully reflect the scale of economic contraction,” according to the note, which was reported on Bloomberg overnight.
What else I’m reading this morning on our website, FarmFutures.com:
A bearish turn on Wall Street has trickled over into the commodity space. Bryce Knorr analyzes the murky impacts of the stock market’s downturn on grain markets.
Matthew Kruse analyzes how much heat corn can tolerate – and what that means for grain prices if the mercury stays high this summer.
Roger Wright explains how to calculate the time value of an option.
Is the future of Roundup in jeopardy? Gary Baise investigates.
Will you become a carbon farmer? Executive editor Mike Wilson calls for government polices that let farmers profit form practices that remove carbon and cool the planet.
Morning Ag Commodity Prices – 6/21/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.7825
7.6375
7.66
-0.185
-2.36%
SEP ’22 CORN
$ / BSH
7.3275
7.1175
7.14
-0.2375
-3.22%
DEC ’22 CORN
$ / BSH
7.2575
7.025
7.05
-0.26
-3.56%
MAR ’23 CORN
$ / BSH
7.3025
7.0775
7.09
-0.2625
-3.57%
MAY ’23 CORN
$ / BSH
7.3025
7.09
7.1125
-0.2475
-3.36%
JUL ’23 CORN
$ / BSH
7.2675
7.045
7.0675
-0.235
-3.22%
SEP ’23 CORN
$ / BSH
6.6475
6.485
6.5025
-0.195
-2.91%
JUL ’22 SOYBEANS
$ / BSH
16.9525
16.76
16.8
-0.22
-1.29%
AUG ’22 SOYBEANS
$ / BSH
16.1675
15.9475
15.9775
-0.245
-1.51%
SEP ’22 SOYBEANS
$ / BSH
15.5
15.2475
15.2925
-0.25
-1.61%
NOV ’22 SOYBEANS
$ / BSH
15.29
15.06
15.1075
-0.2675
-1.74%
JAN ’23 SOYBEANS
$ / BSH
15.3675
15.0975
15.14
-0.2725
-1.77%
MAR ’23 SOYBEANS
$ / BSH
15.24
14.99
15.0275
-0.2625
-1.72%
MAY ’23 SOYBEANS
$ / BSH
15.14
14.9475
14.9775
-0.2575
-1.69%
JUL ’23 SOYBEANS
$ / BSH
15.07
14.9125
14.94
-0.2475
-1.63%
AUG ’23 SOYBEANS
$ / BSH
0
#N/A
14.93
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
73.59
71.96
72.38
-1.41
-1.91%
AUG ’22 SOYBEAN OIL
$ / LB
72.08
70.46
70.76
-1.5
-2.08%
JUL ’22 SOY MEAL
$ / TON
440
432.1
434.5
-3.6
-0.82%
AUG ’22 SOY MEAL
$ / TON
424.4
414.9
417.5
-5
-1.18%
SEP ’22 SOY MEAL
$ / TON
413
403
405.8
-5.9
-1.43%
OCT ’22 SOY MEAL
$ / TON
406.5
396.3
398.7
-6.5
-1.60%
DEC ’22 SOY MEAL
$ / TON
408
398
401
-6
-1.47%
JUL ’22 Chicago SRW
$ / BSH
10.3325
10.04
10.19
-0.1525
-1.47%
SEP ’22 Chicago SRW
$ / BSH
10.46
10.1625
10.3125
-0.155
-1.48%
DEC ’22 Chicago SRW
$ / BSH
10.6125
10.31
10.465
-0.1475
-1.39%
MAR ’23 Chicago SRW
$ / BSH
10.7175
10.4175
10.5725
-0.145
-1.35%
MAY ’23 Chicago SRW
$ / BSH
10.6925
10.4575
10.5775
-0.175
-1.63%
JUL ’22 Kansas City HRW
$ / BSH
11.08
10.8125
10.8925
-0.1575
-1.43%
SEP ’22 Kansas City HRW
$ / BSH
11.1275
10.88
10.945
-0.175
-1.57%
DEC ’22 Kansas City HRW
$ / BSH
11.265
10.975
11.0425
-0.1725
-1.54%
MAR ’23 Kansas City HRW
$ / BSH
11.3225
11.0575
11.085
-0.1875
-1.66%
MAY ’23 Kansas City HRW
$ / BSH
11.26
11.085
11.12
-0.09
-0.80%
JUL ’22 MLPS Spring Wheat
$ / BSH
11.7
11.495
11.57
-0.125
-1.07%
SEP ’22 MLPS Spring Wheat
$ / BSH
11.7275
11.5
11.55
-0.15
-1.28%
DEC ’22 MLPS Spring Wheat
$ / BSH
11.7875
11.55
11.6375
-0.1175
-1.00%
MAR ’23 MLPS Spring Wheat
$ / BSH
11.8675
11.6325
11.74
-0.0775
-0.66%
MAY ’23 MLPS Spring Wheat
$ / BSH
11.89
11.89
11.89
0.05
0.42%
SEP ’21 ICE Dollar Index
$
104.26
103.73
104.12
-0.368
-0.35%
JU ’21 Light Crude
$ / BBL
112.08
108.72
111.2
1.64
1.50%
AU ’21 Light Crude
$ / BBL
110.78
106.82
109.87
1.88
1.74%
JUL ’22 ULS Diesel
$ /U GAL
4.5342
4.3135
4.4558
0.116
2.67%
AUG ’22 ULS Diesel
$ /U GAL
4.405
4.1799
4.3255
0.1164
2.77%
JUL ’22 Gasoline
$ /U GAL
3.945
3.717
3.9225
0.1295
3.41%
AUG ’22 Gasoline
$ /U GAL
3.8324
3.6077
3.8021
0.1209
3.28%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
172.95
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
174.8
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
138.025
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
136.575
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
111
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
107.875
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.35
24.29
24.35
0.05
0.21%
JUL ’22 Class III Milk
$ / CWT
23.57
23.5
23.56
0
0.00%
AUG ’22 Class III Milk
$ / CWT
24
23.97
24
-0.13
-0.54%
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