Morning report: Wheat rises on the skepticism, corn also sees a slight price bump. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 1-2 cents
Soybeans up 8-116 cents; Soymeal up $2.30/ton; Soyoil down $0.25/lb
Chicago wheat up 1-3 cents; Kansas City wheat up 5-6 cents; Minneapolis wheat up 5-7 cents
*Prices as of 6:55am CDT.
Good morning! It’s the first day of June which means it’s the first day of June Dairy Month! I observed by stockpiling ice cream on my grocery store last night. I hope you find a way to celebrate the delicious work of those awesome dairy farmers at some point this month! Yes, I know I’m biased!
Feedback from the Field updates! Planting progress may be slowing down in the Heartland, but growers in the Upper Midwest continue to face planting obstacles, according to responses from growers in our latest Feedback from the Field column. Planting is progressing, but not as quickly as most growers would like.
Most notably, corn and spring wheat producers across North Dakota and Minnesota are already weighing the possibility of prevent plant acreage as rain delays continue to mount. We even had a response from a grower on the Canadian prairies this week who also indicated that delays in that region could cause acreage shifts.
“We are getting more rain today,” the farmer shared late last week. “So we are delayed planting for a few more days. Soon it will be late for spring wheat here.”
Want to see how your farm’s progress stacks up against other growers across the country? 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
Corn prices wavered between the red and green this morning, with bargain buyers swooping in at last glance to take advantage of prices approaching an eight-week low. Chicago futures prices rose $0.01 on the prospect. Planting progress is in its late phases, so market focus over the next couple weeks will likely begin to shift to weather reactions that could impact crop development.
USDA’s weekly Crop Progress report released yesterday saw corn planting progress rise 14% on the week to 86% complete as of May 29. This total also includes acres that were shifted into prevent plant, so it is not necessarily indicative of total 2022 corn acreage planted. We will get more clarity into that acreage in USDA’s June 30 Acreage report released at the end of this month.
Planting continues to lag behind the five-year average in Minnesota (10% behind at 82% complete) and North Dakota (27% behind at 56% complete). Both regions will have a few days of clear weather this week to catch up on planting if that acreage has not already been declared for prevent plant.
But after a slow start, the past few weeks of dizzying planting paces have put this week’s planting completion rate just 1% behind the five-year average for the same reporting period. A year ago, 94% of the crop was planted.
Emergence rates offer more optimism, thanks to a heat spell across the Midwest in mid-May. As of Sunday, 61% of planted crops had emerged from the soil, up 22% from the previous week but still 7% behind the five-year average.
Cooler temperatures over the Midwest over the past week will likely keep freshly planted crops from emerging faster. But scattered showers expected in the region over the next couple days could help coax along crop development.
Soybeans
Soybean prices rose $0.07-$0.11/bushel overnight as rainy forecasts for the Eastern Corn Belt is likely to delay planting progress in the region until late in the weekend. Tight global edible oil supplies and slowing palm oil production in Malaysia also was a bullish omen for global oilseed markets.
USDA releases its monthly soy crush volumes for April 2022 today. Pre-report trade estimates peg today’s figure at 180.5 million bushels. Trade guesses ranged between 178.5 million – 182.0 million bushels.
If the average guess is realized, that would represent a 12.4-million-bushel drop from March 2022 soy crush volumes. While that shift is consistent with historical trends for the monthly change, it marks the fourth month of smaller crush volumes since a new record high volume was set in December 2021.
At the daily level, a 180.5-million-bushel crush rate also translates into 6.02 million bushels of soybeans crushed per day. That is the slowest daily processing rate since February 2022 (5.81 million bushels per day). Planned maintenance closures at plants in Minnesota over February will likely contribute to the smaller April soybean crush volumes expected in today’s report.
Yesterday’s Crop Progress report saw 66% of anticipated 2022 soybean acres planted as of May 29. It marked a 16% increase from the previous week, with steady gains reported from the Plains states. 2022 soybean planting paces are only 1% behind the five-year average for the reporting period.
North Dakota (+16% on the week to 23% complete) and Minnesota (+23% to 55% complete) still lag significantly behind five-year averages (70% and 80% complete, respectively). But clear weather anticipated this week in the Northern Plains could keep planters rolling to catch up with the national average.
Wheat
Wheat prices edged $0.01-$0.09/bushel higher as markets remain concerned about Russia’s willingness to allow safe passage for Ukrainian grain cargoes in the Black Sea amid Russia’s ongoing invasion of Ukraine.
U.N. officials were optimistic about a deal following discussions with Moscow yesterday that would facilitate a deal for Ukrainian grains in exchange for Russian fertilizers, but traders are more skeptical Russia will comply with any deal that would not lift current economic sanctions previously imposed by Western countries.
“The evolution of prices remains strongly dependent on progress on the geopolitical front and on flows from the Black Sea basin, with its share of uncertainties,” consultancy Agritel said.
Ukraine’s grain traders’ union, UGA, issued new forecasts for 2022 Ukrainian wheat production overnight. The updated projections peg the crop at 705.4 million bushels – a staggering 42% decrease from the 2021 Ukrainian wheat harvest.
UGA expects that blocked access to export markets due to Russia’s naval blockade will grow domestic stocks to record volumes. This is a similar dynamic at play in Ukraine’s corn market, where despite a 54% annual drop in anticipated 2022 Ukrainian corn production, adequate storage capabilities are now a top concern for Ukrainian producers.
“At the same time, exports from Ukraine in the new season can reach 30 million tonnes (1.1B bu.), provided that the throughput capacity of crossings at the borders of Ukraine is doubled,” UGA said in a statement, acknowledging that Russian naval blockades continue to represent a major hinderance to global trade flows in the Black Sea.
As more growers in Minnesota and North Dakota shifted planned spring wheat acreage into prevent plant and other crop acreage, national spring wheat planting rates accelerated 24% on the week to 73% complete as of May 29.
That figure remains 19% lower than the five-year average for the same reporting period, reflecting the severity of unfavorable planting conditions in the Northern Plains this year where growers battled late season snows, cold soil temperatures, and obnoxiously wet weather following a year of drought.
Winter wheat conditions improved another percentage point this week with 29% of the crop now in good to excellent condition. About 72% of the nation’s winter wheat crop has reached the heading phase, which means it will only be a few weeks until peak harvest activity begins.
Weather
Cooler temperatures are expected to linger over the Heartland again today, according to NOAA’s short-range forecasts. A rain system spanning from the Central and Southern Plains into the Eastern Corn Belt is expected to drop over an inch of precipitation over the region during the next 24 hours. The showers are likely to linger in the region until Friday.
NOAA’s 6- to 10-day forecasts updated yesterday are trending cool and wet for the Upper Midwest while the 8- to 14-day forecast is beginning to show somewhat dryer – but still cool – conditions for the region.
Financials
S&P 500 futures moved 0.21% higher to $4,139.75 as traders expressed concern about the Federal Reserve’s tightened monetary policy approach and just how far the Fed should go to curb inflation.
Black Swan in the Black Sea series
Our May/June 2022 print edition cover story was about the ongoing crisis in the Black Sea. Our online series, Black Swan in the Black Sea, was published to our website last week and features an in-depth look at market fallout from Russia’s invasion of Ukraine earlier this year, as well as where the markets and global trade relationships could be headed in the future.
The first article in the series examines the war’s impacts to the corn market. Part two examined how wheat trade flows have shifted – and could further shift – due to the Black Sea conflict. Part three examined the impact of the Black Sea conflict on global fertilizer markets and addressed who will first feel the pain of tight global fertilizer supplies. The final installment shows how edible oil trades could foreshadow future trading relations in the Black Sea conflict era. The outlook for global grain and oilseed markets remains murky and likely quite volatile for the foreseeable future. I was also a featured guest on the Around Farm Progress podcast, where I further discussed my takeaways from writing this cover story series and how I expect global trade dynamics to shape out in the future. Check it out here if you want to learn more!
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr previews post-Memorial Day market trading. Knorr’s top insights? New crop price rallies may not quite match post-Ukrainian invasion highs, but there is still room for upward price appreciation.
Farm family conflict does not mean failure. K Coe Ipsom’s Davon Cook has valuable insights to constructively navigate family squabbles on the farm.
The upcoming Farm Progress 365 virtual sessions this month are geared towards crop scouting, pest management, and other seasonal marketing insights – sign up now!
Indiana farmer Kyle Stackhouse finally beat out the rains to finish 2022 planting.
Naomi Blohm points out that end users celebrated the recent selloff in the corn market.
Morning Ag Commodity Prices – 6/1/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.5625
7.4775
7.53
-0.005
-0.07%
SEP ’22 CORN
$ / BSH
7.2725
7.185
7.2425
-0.0075
-0.10%
DEC ’22 CORN
$ / BSH
7.1375
7.05
7.1125
-0.0025
-0.04%
MAR ’23 CORN
$ / BSH
7.185
7.1
7.16
-0.005
-0.07%
MAY ’23 CORN
$ / BSH
7.1825
7.1125
7.165
-0.0025
-0.03%
JUL ’23 CORN
$ / BSH
7.1225
7.0675
7.1075
-0.0125
-0.18%
SEP ’23 CORN
$ / BSH
6.58
6.545
6.58
0.005
0.08%
JUL ’22 SOYBEANS
$ / BSH
16.9425
16.8075
16.865
0.0325
0.19%
AUG ’22 SOYBEANS
$ / BSH
16.3
16.1775
16.2275
0.025
0.15%
SEP ’22 SOYBEANS
$ / BSH
15.56
15.4125
15.5
0.0525
0.34%
NOV ’22 SOYBEANS
$ / BSH
15.2275
15.0325
15.1525
0.0575
0.38%
JAN ’23 SOYBEANS
$ / BSH
15.2725
15.085
15.2025
0.06
0.40%
MAR ’23 SOYBEANS
$ / BSH
15.2
15.0225
15.135
0.0575
0.38%
MAY ’23 SOYBEANS
$ / BSH
15.2
15.095
15.135
0.055
0.36%
JUL ’23 SOYBEANS
$ / BSH
15.1875
15.05
15.1125
0.0475
0.32%
AUG ’23 SOYBEANS
$ / BSH
0
#N/A
14.855
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
78.14
76.61
76.86
-1.06
-1.36%
AUG ’22 SOYBEAN OIL
$ / LB
76.65
75.21
75.44
-0.94
-1.23%
JUL ’22 SOY MEAL
$ / TON
418.5
413.4
417.5
2.7
0.65%
AUG ’22 SOY MEAL
$ / TON
414.3
409.2
413.2
2.8
0.68%
SEP ’22 SOY MEAL
$ / TON
410.2
405.3
409.4
3.1
0.76%
OCT ’22 SOY MEAL
$ / TON
405.8
400.1
405.2
4
1.00%
DEC ’22 SOY MEAL
$ / TON
407.2
401
406.3
4.3
1.07%
JUL ’22 Chicago SRW
$ / BSH
10.98
10.8525
10.8775
0.0025
0.02%
SEP ’22 Chicago SRW
$ / BSH
11.0675
10.945
10.965
-0.01
-0.09%
DEC ’22 Chicago SRW
$ / BSH
11.1575
11.0375
11.06
-0.01
-0.09%
MAR ’23 Chicago SRW
$ / BSH
11.2025
11.09
11.1125
-0.0075
-0.07%
MAY ’23 Chicago SRW
$ / BSH
11.0875
11.0125
11.065
0.04
0.36%
JUL ’22 Kansas City HRW
$ / BSH
11.775
11.635
11.69
0.035
0.30%
SEP ’22 Kansas City HRW
$ / BSH
11.83
11.7
11.8075
0.0875
0.75%
DEC ’22 Kansas City HRW
$ / BSH
11.92
11.8
11.895
0.085
0.72%
MAR ’23 Kansas City HRW
$ / BSH
11.9425
11.825
11.87
0.0375
0.32%
MAY ’23 Kansas City HRW
$ / BSH
11.63
11.63
11.63
-0.02
-0.17%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.605
12.5
12.575
0.1
0.80%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.605
12.4975
12.5525
0.0775
0.62%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.6425
12.48
12.54
0.085
0.68%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.635
12.5075
12.51
0.0625
0.50%
MAY ’23 MLPS Spring Wheat
$ / BSH
12.3
#N/A
12.39
0
0.00%
JUN ’21 ICE Dollar Index
$
102.07
101.77
102.025
0.259
0.25%
JU ’21 Light Crude
$ / BBL
116.94
114.58
115.91
1.24
1.08%
AU ’21 Light Crude
$ / BBL
114.12
111.86
113.25
1.34
1.20%
JUL ’22 ULS Diesel
$ /U GAL
4.0786
3.9702
4.071
0.136
3.46%
AUG ’22 ULS Diesel
$ /U GAL
3.9757
3.8833
3.9731
0.1262
3.28%
JUL ’22 Gasoline
$ /U GAL
4.0521
3.9373
4.0272
0.111
2.83%
AUG ’22 Gasoline
$ /U GAL
3.8646
3.7734
3.8416
0.0961
2.57%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
165.125
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
168.125
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
130.525
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
130.375
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
107.975
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
108
0
0.00%
MAY ’22 Class III Milk
$ / CWT
25.18
#N/A
25.2
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.62
24.48
24.62
0.05
0.20%
JUL ’22 Class III Milk
$ / CWT
24.72
24.68
24.72
0.03
0.12%
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