Afternoon report: Corn struggles for gains amid recession jitters; wheat stumbles on this week’s moisture in the Midwest & Plains
TGIF! Our annual Farm Futures December 2023 farmer survey will close over the weekend! The data from this survey is used to predict 2022 production ahead of the January 2023 WASDE report and also provides the first look at 2023 acreage, which will be announced at our Farm Futures Business Summit in mid-January 2023.
If you haven’t taken our survey yet (which we shortened for your convenience!), and would still like to participate, click this link to start the survey. We look forward to sharing the results with you on our platforms after the new year begins!
Corn
Corn markets were never able to gain any upward momentum during today’s trading session, as Chicago futures closed today flat to $0.01/bushel lower. As I mentioned in this morning’s newsletter, yesterday’s broad financial market jitters continued to spill over into the commodity space today as investors around the world remain suspicious of a potential global recession in 2023.
Old crop futures contracts closed at $6.10-$6.54/bushel. New crop futures closed between $5.70-$6.10/bushel.
Soybeans
Hot demand for soymeal propped up old crop futures contract gains for the soybean market today. Contract months for the 2022 growing season closed $0.03-$0.06/bushel higher while new crop contracts were on track to close down $0.01-$0.02/bushel.
Soyoil futures tumbled 1% lower as money managers (speculators) liquidated long positions.
Argentina’s drought concerns created a rally in the soymeal futures market today. The nearby January 2023 contract closed $7.70/ton higher to $463/ton. Argentina is the world’s largest soymeal exporter, so the expected crop damage could bode favorably for U.S. soy producers and processors.
Losses were limited by a robust weekly export sales report from USDA yesterday, which highlighted a 69% weekly increase in 2022/23 soybean export sales orders (108.1M bu.). The estimate surprised market watchers, who had not been expecting USDA’s total yesterday to top 96 million bushels.
But growing worries about Argentina’s crop helped keep further losses at bay in the soybean complex this morning. Argentina has enjoyed some of the same rains that have been falling in Brazil over the past week, but this year’s drought remains so severe that the recent uptick in moisture is still not enough to sustain young Argentine corn and soybean crops.
“Despite some rains recorded last Friday over the center of the agricultural area, water supplies continue to be inconsistent and insufficient,” the Buenos Aires Grains Exchange (BdeC) stated in a weekly report published yesterday.
The Exchange reported that 51% of the more than 41 million acres of Argentine soybeans expected to be grown this year were planted as of Wednesday. That pace is 14.2% slower than last year as farmers have delayed planting in hopes for rain.
But as farmers continue to wait, the chances for a smaller Argentine soybean harvest grows. Planting is already 20%-22.3% behind in the Pampas Grains Belt, which is Argentina’s largest crop-producing region.
As the world’s third largest soybean exporter and the world’s largest processed soy products exporter, further damage to Argentina’s soybean crop this winter could have some bullish impacts on U.S. soybean prices.
Wheat
Wheat prices tumbled $0.01-$0.14/bushel lower today as hedge funds liquidated their long positions on wheat following a cross-country winter precipitation system this week that helped replenish depleted soil moisture levels across the U.S. Plains and Midwest.
Even with today’s losses, the latest round of Russian attacks on Ukraine contributed to Chicago wheat prices closing nearly 3% higher on the week after recording five straight weeks of declining prices. Kansas City futures were on pace to rise 2% on the week while Minneapolis futures were poised for a 2% weekly decline.
Worries about a cold snap in Europe could not lift European wheat prices out of red territory today, despite worries that a warm autumn season could leave soft wheat crop seedlings more susceptible to frost risk. But virtually all of France’s soft wheat crop was in good to excellent condition as of early last week, so it seems likely the cold spell will just trigger winter dormancy for the soft wheat crop.
A fresh wave of Russian missiles targeted Ukrainian energy facilities overnight – and with some degree of success. A senior Ukrainian presidential official, Kyrylo Tymoshenko, told reporters overnight that the strikes caused several emergency power shutdowns across Ukraine, though Tymoshenko did not specify which facilities suffered damage.
Wheat markets showed some sign of worry about Ukrainian export paces as a result of the missile strikes, with U.S. futures rising $0.01-$0.03/bushel this morning. Drought worries in Argentina also helped prop up the wheat market this morning, though gains were limited by a stronger dollar.
Weather
Snow will continue to hover over the Northern Plains and Upper Midwest today, according to NOAA’s short-term forecasts. However, today’s accumulation is likely to be much lighter than that from earlier this week. After a week in which much of the Heartland has experienced heavy rain, snow, and/or ice, skies are expected to clear through the weekend while cold weather settles in.
NOAA’s 6-10-day forecasts are trending much cooler than usual for most of the continental U.S. through late next week. Chances for precipitation during that time are leaning above average for the Northern and Central Plains as well as the Great Lakes region.
The temperature trends in the 8-10-day outlook will continue to remain unusually cold across the country as the New Year approaches. Chances for moisture are likely to remain slightly above to near normal for the Northern and Central Plains during that time while the Eastern Corn Belt could see below average chances for precipitation.
Financials
S&P 500 futures are on track to close 0.83% lower today to $3,863.31 because of how poorly the British Royal Family has treated Harry and Meghan.
I’m totally kidding!! But it was a painfully slow day in the markets and the thin trading volumes left me little other opportunity for entertainment than to follow the latest royal drama. This is why we need more capitalism and less monarchy in our society (or even for an extended market holiday at Christmas…) – so I can better focus on those money moves!!!
Back to the important stuff – the S&P 500 index recovered from more bearish activity earlier in the day after weak manufacturing data released Friday morning triggered more concerns about an economic slowdown.
The expectation of more interest rate increases from both the U.S.’s Federal Reserve and the European Central Bank to curb inflation was the key driver of this bearish flurry over the past couple days. Markets are worried that the high rates could send the global economy into a recession in 2023 if interest rates are not handled properly.
“They’ve effectively raised the bar on the magnitude and pace by which inflation would have to fall to warrant…a true pivot where they would actually be cutting rates,” Hani Redha, portfolio manager at PineBridge Investments, told the Wall Street Journal. “That’s really bearish.”
Energy prices also skidded lower on demand worries amid a potential global recession that could be brought on by the rate hikes.
What else I’m reading this morning on our website, FarmFutures.com:
This one is a few weeks old, but still worth a read! I’ve referenced it several times and recommended it to farmers looking to use up cash over the past couple weeks, so I’m bringing it back: Bryce Knorr recommends hedging your 2023 fuel needs now – to lock in 2023 profits and maximize 2022 tax strategies.
Executive editor Mike Wilson evaluates Ukraine’s agricultural losses in its ongoing war with Russia.
Naomi Blohm explains why sorghum acres may take off next spring.
Indiana Farmer Kyle Stackhouse is having a hard time finding the best choice for 2023 seeds.
AgMarket.Net’s Matt Bennett explains why 2022 profits could be a problem in 2023.
could help improve ag exports.
The 2023 Farm Futures Business Summit is back in Coralville, Iowa and we have a packed speaker lineup – we hope you’ll join us for all the fun!
My latest E-corn-omics column takes a deep dive into all the recent happenings in the fertilizer markets.
Closing Ag Commodity Prices – 12/16/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’23 CORN
$ / BSH
6.5575
6.5
6.535
0
0.00%
MAY ’23 CORN
$ / BSH
6.56
6.5075
6.5375
0
0.00%
JUL ’23 CORN
$ / BSH
6.5075
6.46
6.48
-0.01
-0.15%
SEP ’23 CORN
$ / BSH
6.1225
6.09
6.1
-0.0125
-0.20%
DEC ’23 CORN
$ / BSH
5.99
5.96
5.975
-0.005
-0.08%
AR2 ’24 CORN
$ / BSH
6.0625
6.04
6.06
0
0.00%
AY2 ’24 CORN
$ / BSH
6.095
6.0775
6.095
0.005
0.08%
UL2 ’24 CORN
$ / BSH
6.09
6.0625
6.09
0.01
0.16%
SEP ’24 CORN
$ / BSH
5.64
#N/A
5.7
-0.015
0.00%
JAN ’23 SOYBEANS
$ / BSH
14.86
14.655
14.79
0.055
0.37%
MAR ’23 SOYBEANS
$ / BSH
14.8925
14.6925
14.83
0.0625
0.42%
MAY ’23 SOYBEANS
$ / BSH
14.9175
14.7225
14.8575
0.06
0.41%
JUL ’23 SOYBEANS
$ / BSH
14.9425
14.7575
14.8825
0.0475
0.32%
AUG ’23 SOYBEANS
$ / BSH
14.695
14.545
14.6575
0.0325
0.22%
SEP ’23 SOYBEANS
$ / BSH
14.185
14.0375
14.155
0.03
0.21%
NOV ’23 SOYBEANS
$ / BSH
13.9275
13.7975
13.8875
0.005
0.04%
AN2 ’24 SOYBEANS
$ / BSH
13.95
13.83
13.9175
-0.0025
0.00%
AR2 ’24 SOYBEANS
$ / BSH
13.88
13.7725
13.845
-0.01
0.07%
AY2 ’24 SOYBEANS
$ / BSH
13.84
13.8225
13.815
-0.015
0.02%
UL2 ’24 SOYBEANS
$ / BSH
13.8525
13.8
13.8275
-0.0175
-0.13%
JAN ’23 SOYBEAN OIL
$ / LB
64.15
62.35
63.18
-0.64
-1.00%
MAR ’23 SOYBEAN OIL
$ / LB
63.28
61.47
62.28
-0.7
-1.11%
JAN ’23 SOY MEAL
$ / TON
469
454.8
463
7.7
1.69%
MAR ’23 SOY MEAL
$ / TON
466.4
452.2
460.4
7.8
1.72%
MAY ’23 SOY MEAL
$ / TON
457.9
445.7
452.6
6.4
1.43%
JUL ’23 SOY MEAL
$ / TON
452
441.8
446.8
5.1
1.15%
AUG ’23 SOY MEAL
$ / TON
443.2
434.4
439
4.8
1.11%
MAR ’23 Chicago SRW
$ / BSH
7.6425
7.5075
7.58
0.0075
0.10%
MAY ’23 Chicago SRW
$ / BSH
7.72
7.595
7.655
-0.005
-0.07%
JUL ’23 Chicago SRW
$ / BSH
7.76
7.64
7.7
-0.005
-0.06%
SEP ’23 Chicago SRW
$ / BSH
7.81
7.7025
7.7475
-0.015
-0.19%
DEC ’23 Chicago SRW
$ / BSH
7.9175
7.815
7.86
-0.0125
-0.16%
AR2 ’24 Chicago SRW
$ / BSH
7.9675
7.8775
7.9125
-0.0175
-0.22%
AY2 ’24 Chicago SRW
$ / BSH
7.9375
7.9375
7.88
-0.05
0.09%
MAR ’23 Kansas City HRW
$ / BSH
8.6425
8.43
8.47
-0.135
-1.57%
MAY ’23 Kansas City HRW
$ / BSH
8.555
8.375
8.4125
-0.115
-1.35%
JUL ’23 Kansas City HRW
$ / BSH
8.4725
8.3125
8.3525
-0.095
-1.12%
SEP ’23 Kansas City HRW
$ / BSH
8.47
8.3275
8.3475
-0.11
-1.30%
DEC ’23 Kansas City HRW
$ / BSH
8.5125
8.3725
8.3875
-0.1075
-1.27%
AR2 ’24 Kansas City HRW
$ / BSH
8.3675
8.3575
8.3575
-0.105
-1.24%
AY2 ’24 Kansas City HRW
$ / BSH
0
#N/A
8.4
0
0.00%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.2225
9.09
9.1275
-0.06
-0.65%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.1725
9.0375
9.055
-0.085
-0.93%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.0975
9.025
9.05
-0.0625
-0.69%
SEP ’23 MLPS Spring Wheat
$ / BSH
8.975
8.885
8.9175
-0.0325
-0.36%
DEC ’23 MLPS Spring Wheat
$ / BSH
8.96
8.9325
8.955
-0.0275
-0.31%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
8.98
0
0.00%
AY2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
0
0
0.00%
DEC ’21 ICE Dollar Index
$
104.72
104.23
104.7
0.168
0.16%
JA ’21 Light Crude
$ / BBL
76.57
73.33
74.13
-1.98
-2.60%
FE ’21 Light Crude
$ / BBL
76.58
73.4
74.3
-1.85
-2.43%
JAN ’23 ULS Diesel
$ /U GAL
3.2963
3.1116
3.1284
-0.155
-4.72%
FEB ’23 ULS Diesel
$ /U GAL
3.2242
3.0683
3.078
-0.1366
-4.25%
JAN ’23 Gasoline
$ /U GAL
2.19
2.1013
2.1285
-0.0383
-1.77%
FEB ’23 Gasoline
$ /U GAL
2.2004
2.1157
2.1423
-0.0377
-1.73%
JAN ’23 Feeder Cattle
$ / CWT
184.45
183.125
184.1
1.05
0.57%
MAR ’23 Feeder Cattle
$ / CWT
185.525
184.425
185.025
0.35
0.19%
DE ’21 Live Cattle
$ / CWT
155.125
154.15
154.95
0.9
0.58%
FE ’21 Live Cattle
$ / CWT
155.85
154.75
155.775
0.925
0.60%
FEB ’23 Live Hogs
$ / CWT
86.275
81.65
85.925
4.275
5.24%
APR ’23 Live Hogs
$ / CWT
93.175
89.425
92.825
3.65
4.09%
DEC ’22 Class III Milk
$ / CWT
20.58
20.49
20.52
-0.02
-0.10%
JAN ’23 Class III Milk
$ / CWT
19.64
19.14
19.23
-0.41
-2.09%
FEB ’23 Class III Milk
$ / CWT
19.26
19.03
19.1
-0.17
-0.88%
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