Afternoon report: Corn, soybeans and wheat all suffer deep cuts in Thursday’s session
Grain prices have reached nearly unprecedented levels in 2022. Because of that, it doesn’t take much for volatility to shift prices in the other direction. That was the case today, with promises of widespread Midwestern rains this weekend and early next week causing a selloff that pushed corn and soybean prices more than 3% lower. Harvest progress across the Northern Hemisphere continues to hammer wheat prices, which fell another 2% to 3.75% today.
Wetter weather is coming to parts of the central U.S. between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Large parts of Iowa and Minnesota may see the largest totals, ranging between 0.75″ and 1.0″. NOAA’s 8-to-14-day outlook predicts seasonally warm weather for most of the Midwest and Plains between June 30 and July 6, with wetter-than-normal conditions returning to the Plains, upper Midwest and parts of the western Corn Belt.
On Wall St., the Dow slipped 26 points lower in afternoon trading to 30,456, as investors remain skittish that high inflation and rising interest rates could trigger a recession. Energy futures were also in the red, with crude oil down 1.25% to $104 per barrel this afternoon. Diesel and gasoline saw similar percentage cuts. The U.S. Dollar firmed moderately.
On Wednesday, commodity funds were net buyers of corn (+3,000), soymeal (+1,000) and CBOT wheat (+4,500) contracts but were net sellers of soybeans (-13,000) and soyoil (-8,000).
Corn
Corn prices suffered a significant setback as much needed rains are expected to arrive across large portions of the Midwest over the next several days, which triggered a round of technical selling. Broad losses for other commodities generated additional headwinds. July futures dropped 24.25 cents to $7.4375, while September futures lost 35.75 cents to $6.6625.
Corn basis bids were largely steady across the central U.S. but did tilt 7 cents higher at an Indiana ethanol plant while picking up a penny at an Illinois river terminal on Thursday.
Ahead of the next USDA export report, out tomorrow morning and covering the week through June 16, analysts expect the agency to show corn sales ranging between 19.7 million and 47.2 million bushels.
The U.S. Energy Information Administration would have typically released its latest round of ethanol production data today but announced delays due to “systems issues.” “We apologize for the inconvenience of this delay, and remain committed to our mission of collecting, analyzing, and disseminating independent and impartial energy information as we resolve this issue,” according to an EIA statement.
The International Grains Council raised its estimates for 2022/23 global corn production to 1.190 billion metric tons, citing an improved outlook in Ukraine. Global corn supplies are expected to be trimmed to 10.669 billion bushels, assuming an uptick in consumption.
Ukrainian analyst APK-Inform reported corn production is better than previously expected, at an estimated 1.091 billion bushels. Ukraine could also harvest 667.8 million bushels of wheat this season. Total grain exports are now estimated at 40.6 million metric tons. Ukraine is among the world’s top sellers of both corn and wheat.
Preliminary volume estimates were for 566,827 contracts, jumping well above Wednesday’s final count of 387,067.
Soybeans
Soybean prices followed a wide range of other commodities, including corn, wheat and crude oil lower after a round of technical selling today. Nearby contracts closed below the $16-per-bushel benchmark for the first time since early April after offering a handful of opportunities to sell above $17 earlier this spring. July futures tumbled 60.75 cents to $15.92, with August futures down 57.25 cents to $15.0675.
Soybean basis bids were largely steady across the central U.S. but mixed at a few locations after firming 4 cents higher at an Iowa river terminal while sliding 3 to 8 cents lower at two other Midwestern locations today.
Prior to Friday morning’s export report from USDA, analysts aren’t in much agreement over what soybean sales will look like for the week ending June 16. Trade guesses ranged from net reductions of 1.8 million bushels to net sales of 29.4 million bushels. Analysts also expect to see soymeal sales ranging between 100,000 and 350,000 metric tons, plus up to 25,000 MT of soyoil sales.
China announced it has tripled its soymeal supplies over the past three months to 1.09 million metric tons amid weakening demand. That was a big cause for soymeal futures to trend more than 1.5% lower today.
Farmers reporting to Feedback from the Field are reporting some early season challenges for the 2022 soybean crop so far. “East-central Illinois is dry and extreme heat is beginning to stress the crop,” according to one producer, with another in Kansas echoing that more rain will soon be needed. Click here to read plenty more farmer anecdotes and learn how you can participate.
Preliminary volume estimates were for 298,471 contracts, rising moderately above Wednesday’s final count of 248,869.
Wheat
Wheat prices faded again on Thursday as worries over fading global demand and ongoing harvest pressure triggered another round of technical selling today. July Chicago SRW futures eroded 37.5 cents lower to $9.39, July Kansas City HRW futures dropped 33.5 cents to $10.0575, and July MGEX spring wheat futures fell 22.5 cents to $10.8350.
Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 5.5 million and 14.7 million bushels for the week ending June 16.
The International Grains Council estimates that global wheat production for the 2022/23 season will reach 28.256 billion bushels.
In Argentina, the Buenos Aires grains exchange lowered its estimates for the country’s 2022/23 wheat plantings to 15.568 million acres. In context, that’s roughly a third of U.S. plantings. Last year, Argentina was the world’s seventh-largest wheat exporters, with sales valued around $3 billion.
Saudi Arabia’s state grains buyer issued a tender to purchase 17.6 million bushels of wheat, which would be for delivery between November and January. Additional details were not immediately available.
Japan purchased 6.2 million bushels of wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 35% was sourced from the U.S. The grain is for shipment in August.
Preliminary volume estimates were for 105,766 CBOT contracts, which was slightly below Wednesday’s final count of 116,544.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
767.25
734.5
746.75
-24.25
22-Sep
700.75
655.5
666.75
-35.75
Soybeans
22-Jul
1655.5
1590
1593.25
-60.75
22-Sep
1493.75
1431
1437
-57.25
Soymeal $/ton
22-Aug
416.5
401.2
406
-10.8
Soyoil cents/lb
22-Aug
69.26
65.26
65.51
-3.53
Wheat $/bushel
22-Jul
974.5
934.5
937.25
-37.5
22-Sep
987
946.5
949.25
-38
KC Wheat
22-Jul
1037.75
1000.25
1005
-33.5
22-Sep
1044
1006.25
1010.75
-33.75
MPLS Wheat
22-Jul
1106
1079
1080.5
-22.5
22-Sep
1105.25
1077.5
1079.75
-24.25
Live Cattle cents/lb
22-Jun
137
134.95
135.1
-1.025
Feeder Cattle cents/lb
22-Sep
177.9
175.75
176.875
1.575
Lean Hogs cents/lb
22-Aug
108.55
103.575
103.575
-4.75
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jul
107.05
102.32
104.16
-2.03
Diesel
22-Jul
4.418
4.2629
4.3258
-0.0788
Unleaded Gasoline $/gallon
22-Jul
3.8733
3.709
3.7648
-0.0693
Natural Gas
22-Aug
6.854
6.237
6.274
-0.598
U.S. Dollar Index
22-Sep
104.545
103.84
104.195
0.214
Gold $/ounce
22-Jul
1842.9
1822.4
1841.2
6.9
Copper
22-Jun
3.86
3.767
3.767
-0.1845
Fertilizer Swaps
(as of 06/17)
DAP Tampa-index
1,090.0
-15
DAP-New Orleans
887.4
24.8
Urea-New Orleans
485.0
-57.87
Urea-Middle East
635.0
-40
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
601.3
-19.29
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