Afternoon report: Skepticism abounds over whether the agency’s latest export data is accurate
This morning, USDA released some extremely bullish export sales data – for example, the agency’s total old and new crop sales came in at almost 300 million bushels. That should have sent grain prices soaring.
The trouble was, no one really believed the numbers. And as of this writing (2:30 p.m. CST), USDA has yet to offer any updates or explanations.
With that in mind, traders largely ignored the report and engaged in some technical selling and profit-taking that broke a six-session winning streak for corn, which slid more than 1% lower by the close. Soybeans also suffered moderate losses today, while a late-session selloff slashed wheat prices by 3% to 3.5%.
At least some measurable moisture will fall on most of the Corn Belt between Friday and Monday, with a few spots set to gather another 1″ or more, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts below-average precipitation for the Northern Plains and upper Midwest between September 1 and September 7, with warmer-than-normal conditions spreading across the Plains and western Corn Belt during that time.
On Wall St., the Dow added 133 points in afternoon trading to 33,102 as investors anxiously await more details from this year’s annual Federal Reserve economic symposium, held in Jackson Hole, Wyo. Energy futures were mixed but mostly lower. Cruse oil dropped 2.25% this afternoon to $92 per barrel. Diesel was also down 1.5%, while gasoline firmed 0.5% higher. The U.S. Dollar softened moderately.
On Wednesday, commodity funds were net buyers of CBOT wheat (+3,500) contracts but were net sellers of soybeans (-3,500) and soyoil (-3,000). Funds were roughly even when trading corn and soymeal contracts yesterday.
Corn
Corn prices succumbed to a round of technical selling and profit-taking after coming close to two-month highs earlier in the week. Spillover weakness from wheat applied additional headwinds today. September futures dropped 7.75 cents to $6.58, with December futures down 6.5 cents to $6.5075.
Corn basis bids were mostly steady to weak after fading 5 cents lower at two Midwestern ethanol plants and an Illinois river terminal on Thursday. An Ohio elevator bucked the overall trend after tracking 3 cents higher today.
The European Commission lowered its forecast for 2022/23 corn production by nearly 10% to 2.335 billion bushels, likely due to the ongoing hot, dry weather that has plagued the continent this summer. EU corn imports during the current marketing year are expected to rise to 787.4 million bushels.
“After two years of rising input prices, an index of Illinois retail production cost averages for nitrogen, phosphate, potash and diesel supplies from June 2 to Aug. 11 dropped nearly 16%,” notes Farm Futures grain market analyst Jacqueline Holland. Are enough factors in play to push prices even lower? Holland explores the possibility in her latest E-corn-omics blog – click here to learn more.
Preliminary volume estimates were for 298,672 contracts, tracking around 13% below Wednesday’s final count of 344,997.
Soybeans
Soybean prices emerged from a choppy session with variable losses as traders struggled with (likely) data glitches in this morning’s export report from USDA. Traders engaged in some technical selling after nearby contracts neared a one-month high on Wednesday. September futures dropped 7.5 cents to $15.5325, with November futures down 27.25 cents to $14.2975.
Soybean basis bids were steady across the Midwest on Thursday with one noticeable exception after tumbling 90 cents lower at an Iowa river terminal today.
Is predicting yield a fool’s game? Josh Green was willing to ask that tough question. Green, a risk management advisor with Advance Trading, He follows that with another critical question: “With so many variables in the marketplace today, what is the best plan to help navigate a continuously changing global balance sheet?” Green offers some analysis that (hopefully) answers these questions in a recent Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 162,607 contracts, shifting moderately below Wednesday’s final count of 194,738.
Wheat
Wheat prices succumbed to a round of technical selling and profit-taking after moving higher for four consecutive sessions. Some contracts lost as much as 3.5% today. September Chicago SRW futures fell 28 cents to $7.67, September Kansas City HRW futures lost 28.25 cents to $8.68, and September MGEX spring wheat futures faded 28 cents to $8.7975.
The European Commission moderately raised its outlook for 2022/23 EU wheat production to 4.630 billion bushels. The group held its estimates for soft wheat exports steady, at 1.323 billion bushels.
The Russian Union of Grain Exporters anticipates the country’s July-August wheat sales will slump as much as 20% lower from year-ago totals. The union cites “invisible barriers” and other logistical challenges, despite the lack of sanctions following the Russian invasion of Ukraine.
As expected, Japan purchased 4.4 million bushels of food-quality wheat from the United States, Canada and Australia that closed earlier today. Of the total, 49% was sourced from the U.S. The grain is for shipment in October.
Taiwan purchased 1.3 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain is for shipment between October 12 and October 26.
Preliminary volume estimates were for 80,531 CBOT contracts, which was slightly below Wednesday’s final count of 87,393.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Sep
674.25
656.75
657.5
-7.75
22-Dec
666.5
649.25
650
-6.5
Soybeans
22-Sep
1575.75
1550.25
1552.5
-7.5
22-Nov
1467
1428.5
1431.25
-27.25
Soymeal $/ton
22-Oct
434
418
418.7
-14.4
Soyoil cents/lb
22-Oct
67.9
66.36
66.74
-0.1
Wheat $/bushel
22-Sep
803.5
766.5
769.75
-28
22-Dec
821.5
785.75
789
-26.5
KC Wheat
22-Sep
907.25
866.5
869
-28.25
22-Dec
905
863.75
866.25
-28.5
MPLS Wheat
22-Sep
918
878.75
882.75
-28
22-Dec
931.5
892
895.75
-26.5
Live Cattle cents/lb
22-Aug
141.6
140.975
141.175
-0.15
Feeder Cattle cents/lb
22-Sep
184.45
181.4
184.35
1.325
Lean Hogs cents/lb
22-Dec
82.95
81.525
82.775
0.6
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Sep
95.76
92.29
92.98
-1.91
Diesel
22-Sep
4.1154
3.9364
3.954
-0.0592
Unleaded Gasoline $/gallon
22-Sep
2.8619
2.7703
2.8164
0.0157
Natural Gas
22-Oct
9.392
9.147
9.339
0.039
U.S. Dollar Index
22-Sep
108.645
107.945
108.435
-0.181
Gold $/ounce
22-Sep
1765.1
1750
1756
8.2
Copper
22-Aug
3.72
3.695
3.7155
0.055
Fertilizer Swaps
(as of 08/19)
DAP Tampa-index
840.0
-47.5
DAP-New Orleans
826.8
-2.76
Urea-New Orleans
617.3
-3.31
Urea-Middle East
747.5
-15
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
454.7
13.78
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