Afternoon report: Corn and soybeans stand firm, with wheat trending mostly lower on Friday.
Grain markets were lightly mixed after some uneven technical maneuvering on Friday. Corn contracts fared the best, tracking 0.5% to 1% higher on a round of technical buying today. Soybean prices were also firm but made very little headway. Most wheat contracts fell 0.75% to 1.25%, in contrast, after a round of technical selling led to double-digit losses for some contracts.
Most of the central U.S. will at least see some measurable moisture between Saturday and October, with large parts of Minnesota and Wisconsin likely to gather another 1.5″ or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts below-average precipitation and above-average temperatures for the Corn Belt between August 12 and August 18, meantime.
On Wall St., the Dow slipped 20 points lower in afternoon trading to 32,706, despite a much better-than-expected jobs report (528,000 added in July). Wage growth was also up more than expected – a signal that high inflation is still problematic. Energy futures were mixed. Crude oil firmed 0.5% this afternoon, staying just under $89 per barrel. Gasoline climbed 2% higher, while diesel tumbled nearly 3.5% lower. The U.S. Dollar firmed considerably.
On Thursday, commodity funds were net buyers of all major grain contracts, including corn (+5,000), soybeans (+5,000), soymeal (+3,000), soyoil (+1,000) and CBOT wheat (+500).
Corn prices started Friday’s session with modest overnight losses but climbed back into the green today, firming 0.5% to 1% higher on a round of technical buying partly spurred by hot, dry weather expected later in August. September futures gained 6.75 cents to $6.09, with December futures up 2.75 cents to $6.09.
Corn basis bids were steady to soft after weakening 5 to 15 cents across five Midwestern locations on Friday.
Results of the latest Farm Futures grower survey, released today, suggests that respondents are forecasting national corn yields at 174.8 bushels per acre this season. That would be a 2.2 bpa reduction from last year’s record-setting effort of 177.0 bpa, if realized. Farm Futures grain market analyst Jacqueline Holland takes a look at more of the survey’s findings – click here to learn more.
Three ships loaded with nearly 2.3 million bushels of corn have been given the go-ahead to set sail from Ukrainian ports today. The ships will move to Turkey before the grain heads to several final destinations.
French corn production is expected to slide 19% lower from year-ago results, to 486.6 million bushels, per an initial estimate from France’s farm ministry. That’s due in large part to hot, dry conditions that have been prevalent throughout this season. Quality ratings have tumbled 20 points since early July, with French farm office FranceAgriMer estimating that 63% of the crop is rated in good-to-excellent condition through August 1.
Preliminary volume estimates were for 292,173 contracts, moving moderately above Thursday’s final count of 238,318.
Soybean prices survived a choppy session with modest gains on some net technical buying today, partly on spillover strength from soyoil, which climbed 3% higher. August futures picked up 1.5 cents to $16.1650, with September futures tracking a penny higher to $14.6225.
Soybean basis bids were largely steady but did show some significant variability across a handful of locations Friday, moving as much as 15 cents higher at an Illinois river terminal and as much as 20 cents lower at an Indiana elevator today.
Private exporters reported two more large soybean sales to USDA on Friday. Both sales were for 4.9 million bushels, slated for delivery to China and unknown destinations, and both sales are for delivery during the 2022/23 marketing year, which begins September 1.
An exclusive Farm Futures survey of almost 700 farmers shows that soybean yields could reach a new record high of 52.5 bushels per acre this season. Even so, “the estimate is surprisingly optimistic considering current crop conditions and the impending hot and dry weather expected during the middle of the month as the crop approaches peak pod fill stages,” writes Farm Futures grain market analyst Jacqueline Holland. If realized, these per-acre yields would generate a total 2022 production of 4.59 billion bushels, which is nearly 90 million bushels above USDA’s current estimate.
China will again auction off another 18.4 million bushels of its state soybean reserves on August 12. The country has routinely offered similarly sized auctions throughout 2022 in an attempt to boost local supplies and quell high prices.
Preliminary volume estimates were for 150,206 contracts, which was slightly below Thursday’s final count of 162,371.
Wheat prices were mixed but mostly lower amid another round of technical selling today, partly triggered by hopes that Ukrainian exports will soon pick up. Harvest progress across the Northern Hemisphere has consistently trimmed winter wheat prices since mid-May, although prices have mostly leveled off over the past few weeks. September Chicago SRW futures dropped 6 cents to $7.7650, September Kansas City HRW futures fell 11 cents to $8.4925, and September MGEX spring wheat futures inched 0.75 cents higher to $8.95.
Russia’s agriculture ministry announced today that it would downgrade its current forecasts for 2022/23 wheat exports of 1.837 billion bushels if production fails to reach a target of 4.777 billion bushels. That’s certainly possible, given a late start to the season due to cold weather, which is now leading to a slower than usual harvest. “Of course, we will supply our [domestic] market in full, there will be no problem with that. But if the planned volumes are not achieved, we will have to revise our plans to export 50 million [metric] tons,” according to agriculture minister Dmitry Patrushev.
France’s farm ministry made upward revisions to its estimates for 2022 soft wheat production, moving it to 1.245 billion bushels. If realized, it would still be moderately below last season’s production, due to fewer planted acres this season. Yields are estimated at 107.2 bushels per acre. France is Europe’s top grain producer.
Meantime, French farm office FranceAgriMer reports that 100% of this season’s soft wheat has been harvested through August 1, up from 95% the prior week. And 99% of the country’s spring barley harvest is also complete, up from 92% a week ago.
South Korean feed mills purchased 4.4 million bushels of animal feed wheat, likely sourced from Australia, in recent private deals without issuing an international tender. The grain is for shipment between mid-October and mid-December.
The Philippines likely passed on all offers for its tender to purchase 5.5 million bushels of wheat., with prices regarded as too high. One trader suggested the country may wait to see if an uptick in Ukrainian exports will help prices fall. Ukraine’s total grain exports are down nearly 49% so far in the young 2022/23 marketing year.
Preliminary volume estimates were for 102,198 CBOT contracts, firming 12% above Thursday’s final count of 91,577.
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