Morning report: Corn reclaims a one-week high after larger than expected ratings cuts. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 2-3 cents
Soybeans up 10-26 cents; Soymeal up $2.40/ton; Soyoil up $1.87/lb
Chicago wheat up 4-5 cents; Kansas City wheat up 1 cent; Minneapolis wheat up 5-9 cents
*Prices as of 6:55am CDT.
Good morning! Farm Futures is currently conducting its annual August survey, which will help farmers anticipate 2022 corn and soybean yield prospects as well as provide the first look at 2023 acreage intentions. The yield results of our survey will be announced prior to USDA’s August 2022 WASDE report, while I will announce the results of 2023 acreage findings at the 2022 Farm Progress Show.
If you would like to participate in our survey – which is one of the few exclusively farmer-sourced estimates on the market – you can click this link to join in the fun. Thank you!
Leading up to those yield results, my latest E-corn-omics column focuses on evaluating the significance of USDA’s annual August yield estimates. Since 2000, the August corn yield has eventually been revised higher 12 out of the last 22 years, or 55% of the time. This means that there is likely more uncertainty in banking on 2022 corn yields this far ahead of harvest.
There can be a little more certainty with soybean projections. In the past 22 years, USDA has only revised final soybean yields higher 8 times (36%) following the August yield report. That means that there is a higher chance for bullish price action for soybean crops this year, especially if USDA ends up cutting 2022 soybean yield forecasts in January 2023.
The recent heat wave could throw USDA’s August 2022 yields off historical paces. Plus, we know that NASS is currently resurveying June 30 acreage estimates for Minnesota and the Dakotas due to planting delays in that region this spring. The added variability in 2022 production is likely to increase the degree of difficulty in predicting final yields for the 2022/23 marketing season.
Feedback from the Field updates!
How does your farm’s crop conditions stack up against other farms around the country? Click this link to take the survey and share updates about your farm’s crop development. 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!
Author’s note
Today is my first day back after two weeks off to (finally!) celebrate my honeymoon with my husband! Ours was supposed to be an early May 2020 wedding but got pushed back to last July due to the pandemic. Our honeymoon was also delayed from last year because my husband drew a once-in-a-lifetime Rocky Mountain bighorn sheep tag last summer.
But we made up for it by spending the last two weeks in Australia! We went scuba diving on the Great Barrier Reef, hiking (or bush walking, as the locals call it) through the rainforest, camping in the Blue Mountains, befriended a koala and some wallabies, and enjoyed all of the beaches we encountered along the way.
The top highlight – we swam with about five dwarf Minke whales on the Reef. One of them swam within an arm’s length of me! It was an incredible experience, and I was very sad to leave!
I didn’t pay any attention to markets while I was away, which is a standard vacation practice for me to help me recharge. And frankly, it was my honeymoon. There was no way I was going to take any time or happiness away from my husband by worrying about markets and it was the best decision I have made for my marriage so far – second only to marrying him!
So please hang with me over the next day or two as I attempt to refamiliarize myself with the apparent price collapse corn and soybean markets have undergone over the past two weeks. Nearby corn futures are trading 20% lower than when I left, so you can only imagine my surprise waking up this morning to see corn suddenly hovering at $6/bushel!
It was peak winter in Australia, which my husband and I both thoroughly enjoyed (if you haven’t been able to gather by now, we are both cool weather fans). Sydney was still grappling with unusually cool and wet weather, which seems to be a stark contrast to the weather across the Heartland over the past two weeks – and my burnt-up lawn.
And even with another year of strong prospective wheat exports for the Land Down Under, the country is still grappling with the fallout of rising food commodity prices across the world, especially in neighboring Southeast Asia.
Corn
Nearby corn futures prices rose $0.03-$0.05/bushel overnight, rising back above the $6/bushel benchmark as heat damage concerns raised fears about lower 2022 yields across the Heartland overnight. It marked a one-week high for corn prices.
Gains were held in check by skepticism about the Black Sea grain deal, which is expected to see Ukraine ship its first grain exports later this week since late February 2022.
Soybeans
Soybean prices rose $0.10-$0.25/bushel overnight as crop condition ratings continue to tumble across the Midwest. Fears of a smaller crop amid shrinking acreage estimates and growing international demand for edible oils continues to provide bullish prospects for U.S. soybean growers looking to make profitable pricing decisions this summer ahead of harvest.
New crop soybean futures prices clawed back to the $14/bushel benchmark overnight after shedding around $1/bushel over the past two weeks on the heat stress concerns and persistent global oilseed demand prospects.
Wheat
International tenders from Jordan and Taiwan issued overnight added to the growing global demand uptick for wheat. European wheat futures were the largest beneficiary of this dynamic, trading over 1% higher overnight on the renewed demand prospects.
Ongoing international tensions due to Russia’s invasion of Ukraine were a key fundamental of wheat price movement overnight. Currently, the European Union appears to be the world’s preferred supplier of wheat after drought-stricken Pakistan snapped up 11.0 million bushels of wheat from E.U. suppliers last week.
Rising forecasts for U.S. spring wheat yields could not offset demand-driven price hikes, as Minneapolis futures traded $0.05-$0.09/bushel higher overnight, thanks in large part to a weaker dollar. Chicago and Kansas City gains were less pronounced, only trading $0.01-$0.05/bushel higher this morning.
The spring wheat tour in the Northern Plains is coming to a close. After last year’s drought decimated yield forecasts, bountiful rains are likely to produce above average spring wheat yields from the region this year.
“Crop scouts estimated an average hard red spring wheat yield of 48.9 bushels per acre (bpa) in 120 field stops on the first day of the Wheat Quality Council’s (WQC) tour, up from the tour’s day-one findings in 2021 of 29.5 bpa and above the five-year average of 39.0 bpa,” Reuters reporter Karl Plume shared of the scouts’ findings from the road in Mandan, North Dakota last night.
Even though some planting delays have curbed yield hopes and crop development in North Dakota, the crop remains in largely favorable condition. North Dakota is the country’s largest spring wheat-producing state.
“An increased spring crop would offset drought losses from the harvest of hard red winter wheat, the largest U.S. wheat class,” Plume noted of the spring wheat tour findings. “The U.S. Agriculture Department projected overall U.S. wheat production in 2022 of 1.781 billion bushels, up from 1.646 billion in 2021.”
Russia & Ukraine
Turkish officials announced overnight that “preparations are continuing” for the first shipments of Ukrainian grain to leave the country since the onset of Russia’s invasion earlier this year, due in large part to a landmark U.N. deal reached late last week that will bring more Ukrainian grain as well as Russian grains and fertilizers to market.
Russian Deputy Foreign Minister Andrei Rudenko hinted overnight that the deal could collapse if current sanctions on Russian grain and fertilizer shipments are not immediately lifted. Markets are not yet completely convinced a deal will hold, so any news of shipments should generate more price action in the grain and oilseed markets through the remainder of the week. Turkish officials expect those first shipments to begin later this week.
Ukraine announced overnight its marketing year-to-date grain exports are 47% lower than a year ago so far for the 2022/23 season, which began earlier this month. An estimated 25 million metric tonnes of grain remains trapped in Ukraine amid the ongoing Russian invasion.
Weather
Temperatures will moderate in the Upper Midwest, hovering around the 80s today, according to NOAA’s short-range forecasts. Hot temperatures will continue to bake the Central and Southern Plains today. A chance of showers could bring up to an inch of precipitation over the next 24 hours to a band of states stretching from Eastern Colorado and Western Nebraska to Kentucky and Southern Ohio.
Above average temperatures continue to plague NOAA’s 6- to 10-day and 8- to 14-day forecasts updated yesterday. The persistent dryness in the Heartland is expected to continue through the first week of August.
Financials
The Federal Reserve will conclude its two-day Federal Open Market Committee (FOMC) meeting today, after which it is likely to increase the federal funds interest rate by 0.75. The new fed funds rate is expected to range between 2.25% and 2.5% by the conclusion of today’s trading session.
For more insights about the Fed’s future interest rate hikes and how its policies may change going forward, check out this fantastic Wall Street Journal article.
Stock markets rose leading up to the Fed’s announcement, due in large part to better-than-expected earnings results from top tech companies Microsoft and Google. S&P 500 shares traded 0.82% higher to $3,955.50 on the news.
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr forecasts the chances of corn and soybeans becoming collateral damage from another Federal Reserve interest rate hike expected today.
Crop ratings took another beating in Monday’s weekly Crop Progress report from USDA, due to persistent hot and dry weather across the Heartland.
Advance Trading’s Eric Meyer has five tips to become a better marketer.
Senior editor Ben Potter explains how land financing challenges are causing unique problems for millennial farmers.
Darren Frye recommends adding pause, analysis, and perspective to your problem-solving process.
Morning Ag Commodity Prices – 7/27/2022
Contract
Units
High
Low
Last
Net Change
% Change
SEP ’22 CORN
$ / BSH
6.035
5.9175
6.02
0.05
0.84%
DEC ’22 CORN
$ / BSH
6.0675
5.9425
6.0575
0.05
0.83%
MAR ’23 CORN
$ / BSH
6.135
6.015
6.125
0.05
0.82%
MAY ’23 CORN
$ / BSH
6.17
6.0525
6.1625
0.0475
0.78%
JUL ’23 CORN
$ / BSH
6.1625
6.0525
6.1575
0.05
0.82%
SEP ’23 CORN
$ / BSH
5.7875
5.7075
5.7875
0.0325
0.56%
DEC ’23 CORN
$ / BSH
5.6525
5.5625
5.6475
0.04
0.71%
AR2 ’24 CORN
$ / BSH
5.72
5.69
5.72
0.035
0.62%
MAY ’24 CORN
$ / BSH
5.5
#N/A
5.715
0
0.00%
AUG ’22 SOYBEANS
$ / BSH
15.6275
15.3125
15.5975
0.27
1.76%
SEP ’22 SOYBEANS
$ / BSH
14.17
13.865
14.1575
0.16
1.14%
NOV ’22 SOYBEANS
$ / BSH
14.015
13.7175
13.9925
0.155
1.12%
JAN ’23 SOYBEANS
$ / BSH
14.08
13.79
14.06
0.155
1.11%
MAR ’23 SOYBEANS
$ / BSH
14.05
13.775
14.05
0.155
1.12%
MAY ’23 SOYBEANS
$ / BSH
14.0425
13.7725
14.02
0.1275
0.92%
JUL ’23 SOYBEANS
$ / BSH
14.0125
13.7325
13.98
0.125
0.90%
AUG ’23 SOYBEANS
$ / BSH
13.73
#N/A
13.605
0
0.00%
SEP ’23 SOYBEANS
$ / BSH
12
#N/A
13.1075
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.0275
12.7975
13.025
0.1125
0.87%
AN2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
12.94
0
0.00%
AUG ’22 SOYBEAN OIL
$ / LB
62.5
60.1
62.46
2.04
3.38%
SEP ’22 SOYBEAN OIL
$ / LB
60.69
58.4
60.62
1.83
3.11%
AUG ’22 SOY MEAL
$ / TON
476.7
470.6
475.8
3.4
0.72%
SEP ’22 SOY MEAL
$ / TON
437.4
432.6
436.2
1.2
0.28%
OCT ’22 SOY MEAL
$ / TON
419.7
415.4
418.5
-0.5
-0.12%
DEC ’22 SOY MEAL
$ / TON
418.5
414
417
-0.8
-0.19%
JAN ’23 SOY MEAL
$ / TON
415.5
411.7
414.3
-1
-0.24%
SEP ’22 Chicago SRW
$ / BSH
8.1875
7.925
8.135
0.0975
1.21%
DEC ’22 Chicago SRW
$ / BSH
8.3625
8.1075
8.3175
0.0975
1.19%
MAR ’23 Chicago SRW
$ / BSH
8.51
8.26
8.475
0.1025
1.22%
MAY ’23 Chicago SRW
$ / BSH
8.5775
8.3275
8.5475
0.105
1.24%
JUL ’23 Chicago SRW
$ / BSH
8.48
8.245
8.455
0.105
1.26%
SEP ’23 Chicago SRW
$ / BSH
8.445
8.2475
8.4075
0.0825
0.99%
DEC ’23 Chicago SRW
$ / BSH
8.44
8.2225
8.44
0.115
1.38%
SEP ’22 Kansas City HRW
$ / BSH
8.89
8.63
8.8325
0.0625
0.71%
DEC ’22 Kansas City HRW
$ / BSH
8.95
8.715
8.905
0.0625
0.71%
MAR ’23 Kansas City HRW
$ / BSH
9.0025
8.755
8.975
0.0875
0.98%
MAY ’23 Kansas City HRW
$ / BSH
8.965
8.78
8.965
0.0725
0.82%
JUL ’23 Kansas City HRW
$ / BSH
8.855
8.6375
8.855
0.1125
1.29%
SEP ’23 Kansas City HRW
$ / BSH
8.8025
#N/A
8.6925
0
0.00%
DEC ’23 Kansas City HRW
$ / BSH
8.58
8.58
8.58
-0.11
-1.27%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.3775
9.1775
9.3325
0.045
0.48%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.48
9.29
9.4525
0.0575
0.61%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.5825
9.3875
9.5825
0.0925
0.97%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.4875
9.4875
9.4875
-0.08
-0.84%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.6625
#N/A
9.58
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.25
9.25
9.25
0.02
0.22%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
9.295
0
0.00%
SEP ’21 ICE Dollar Index
$
107.02
106.66
106.725
-0.319
-0.30%
SE ’21 Light Crude
$ / BBL
96.66
94.83
96.17
1.19
1.25%
OC ’21 Light Crude
$ / BBL
94.46
92.64
94.14
1.26
1.36%
AUG ’22 ULS Diesel
$ /U GAL
3.6363
3.5581
3.6298
0.0459
1.28%
SEP ’22 ULS Diesel
$ /U GAL
3.5799
3.4983
3.5733
0.0478
1.36%
AUG ’22 Gasoline
$ /U GAL
3.4011
3.3492
3.3995
0.0445
1.33%
SEP ’22 Gasoline
$ /U GAL
3.1382
3.0785
3.1345
0.0527
1.71%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
177.425
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
180.425
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
136.875
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
142.375
0
0.00%
AUG ’22 Live Hogs
$ / CWT
0
#N/A
116.975
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
93.65
0
0.00%
JUL ’22 Class III Milk
$ / CWT
22.5
#N/A
22.5
0
0.00%
AUG ’22 Class III Milk
$ / CWT
21.31
21.18
21.18
0.01
0.05%
SEP ’22 Class III Milk
$ / CWT
20.99
20.81
20.83
0.09
0.43%
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