Morning report: Soybeans mixed amid global economic jitters, Chinese buying. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 2-5 cents
Soybeans mixed; Soymeal up $2.70/ton; Soyoil down $0.76/lb
Chicago wheat down 20-21 cents; Kansas City wheat down 15-20 cents; Minneapolis wheat down 14-15 cents
*Prices as of 6:50am CDT.
Feedback from the Field updates! Are you combining yet? Click this link to take the survey and share updates about your farm’s harvest 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 fell $0.01-$0.05/bushel overnight as global economic jitters and advancing harvest paces continued to limit gains in the corn and wheat markets. Specifically, the stronger dollar and energy market losses limited corn’s attractiveness to prospective international buyers during the early morning hours.
Some of the losses in the corn market were also likely attributed to increasing shipping paces out of Ukraine amid the ongoing “Black Sea Grain Initiative,” though volumes continue to lag behind year-ago paces.
Soybeans
Soybean prices were mixed this morning as markets tried to counter global macroeconomic concerns with optimism from Chinese soybean purchases.
“Soybeans are seeing support from hopes of more Chinese import demand and strength in soymeal prices today,” Matt Ammermann, StoneX commodity risk manager, told Reuters this morning. “But soybeans are also burdened by the recession fears today.”
Wheat
Growing global recession fears as the U.S. Federal Reserve begins its two-day meeting to raise interest rates tomorrow took the biggest bite out of wheat prices this morning, sending the U.S. wheat complex $0.14-$0.20/bushel lower as a stronger dollar limited export prospects for U.S. wheat.
“Wheat is seeing downward pressure today from the stronger dollar which will burden U.S. exports at a time Russian wheat is looking cheap in world markets,” said Ammermann. “Fears central banks will increase interest rates and cause a world recession, so cutting demand, is also hitting wheat and the rest of the grains and soy complex today.”
Accelerating Russian wheat exports also provided stiff competition for U.S. wheat overnight, which further eroded U.S. wheat’s value during the early morning trading session.
“Russian wheat is currently looking a very low price and the forecasts today of a larger Russian harvest could mean more supplies are available if exports can take place in the face of the war disruption. Large volumes of Ukrainian corn are still coming onto the world market which is taking demand from other suppliers.”
The Ukrainian government announced updated 2022 grain production forecasts overnight, noting that the 2022 wheat harvest had yielded about 698 million bushels. USDA’s current forecast for Ukrainian wheat production this year is slightly more optimistic at 716 million bushels.
Even with grain flowing out of three key Ukrainian terminals on the Black Sea, Ukraine’s grain shipping volumes since the first of September continue to drag 34% behind year-ago paces. The smaller harvests will only go so far in alleviating excessive supply volumes in Ukraine if the shipping paces do not accelerate soon.
Ukrainian corn exports
It’s no secret that corn prices fluctuated following the “Grain Initiative” that reopened Ukrainian port facilities in the Black Sea. Prior to Russia’s naval blockade, Ukraine was the world’s fourth largest corn exporter. The conflict’s reduced trade flows paired with heat losses from other large corn producers in the Northern Hemisphere this summer will keep global corn supplies at the tightest level since China’s 2019/20 corn buying spree.
During the first month of the “Grain Initiative,” approximately 25.5 million bushels of Ukrainian corn returned to international channels. Only 40.5 million bushels of Ukrainian corn were exported in the first five months of Russia’s occupation.
But Ukraine still has a massive backlog of corn supplies to be shipped from the 2021/22 marketing year when it harvested its second largest corn crop on record. This year’s crop will only be the seventh largest Ukrainian corn harvest, but nearly 40% of it is expected to remain trapped in storage for another year.
Freeing up Ukraine’s trapped corn bushels would help ease some supply tightness on the global market, but it won’t completely offset the 1.5-billion-bushel production loss global markets are expected to face this year due to this summer’s excessive heat across Europe and the U.S. The current Ukrainian shipping paces still fall short of the speeds needed to boost liquidity in the global corn market.
For U.S. producers, that should help keep a stable floor under high prices during harvest. Corn supplies are likely to remain tight for another year, but that is not likely to provide the same certainty for high prices as it has over the past two years, especially if Ukrainian shipping volumes increase.
My latest E-corn-omics column dives into the recent paces of Ukraine’s corn exports and examines the effects of the backlog on international corn prices. Check it out if you’re curious for more!
Weather
Skies are likely to remain clear over the Heartland over the next couple days, according to NOAA’s short-range forecasts. Some scattered showers are likely to linger over the Northern Plains and Eastern Corn Belt today, but any accumulation is likely to be light.
The 6-10-day NOAA outlook continues to forecast high heat and excessive dryness for most of the Heartland through the end of September. The 8-14-day NOAA outlook is also trending warmer, much like the 6-10-day forecast. But the end of September is likely to be drier across the country. That will aid harvesting progress, which is likely to hit its peak activity by the end of September.
Financials
The U.S. Federal Reserve will meet this week for its Federal Open Market Committee (FOMC) meeting, at which it will raise interest rates to continue fighting inflation. Economists expect an 80% chance that the FOMC will implement another 0.75% interest rate increase, continuing its aggressive hikes as inflation continues to linger at high levels.
Markets are continuing to brace this morning for further evidence of recessionary pressures at play in the global macroeconomy, which sent the S&P 500 0.87% lower overnight to $,3856.25. Oil prices also contracted on fears of a global slowdown. Risk averse investors continued to pile into the dollar overnight, which contributed to grain losses this morning.
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr summarizes the latest USDA report’s hits and misses in today’s Ag Marketing IQ column.
Commstock Investments’ Matthew Kruse shares a Brazilian planting preview but notes that drought worries remain top of mind for local producers and global market watchers alike.
Naomi Blohm explains how increased seasonal demand both at home and abroad is keeping milk prices firm.
Jacqui Fatka summarizes ag groups’ responses to the tentative agreement to keep railways open
Check out our team’s coverage of the September 2022 WASDE reports for all of the key highlights that ushered in the bulls during Monday’s trading session.
Morning Ag Commodity Prices – 9/19/2022
Contract
Units
High
Low
Last
Net Change
% Change
DEC ’22 CORN
$ / BSH
6.8
6.71
6.7125
-0.06
-0.89%
MAR ’23 CORN
$ / BSH
6.86
6.7675
6.7725
-0.0575
-0.84%
MAY ’23 CORN
$ / BSH
6.8625
6.775
6.78
-0.055
-0.80%
JUL ’23 CORN
$ / BSH
6.8
6.7175
6.7225
-0.0525
-0.77%
SEP ’23 CORN
$ / BSH
6.35
6.2975
6.2975
-0.0375
-0.59%
DEC ’23 CORN
$ / BSH
6.2325
6.1725
6.1725
-0.0275
-0.44%
AR2 ’24 CORN
$ / BSH
6.2975
6.2975
6.2975
0.0275
0.44%
AY2 ’24 CORN
$ / BSH
6.29
6.29
6.29
-0.0025
-0.04%
JUL ’24 CORN
$ / BSH
6.2875
#N/A
6.265
0
0.00%
NOV ’22 SOYBEANS
$ / BSH
14.6575
14.43
14.485
0
0.00%
JAN ’23 SOYBEANS
$ / BSH
14.72
14.5075
14.5475
-0.005
-0.03%
MAR ’23 SOYBEANS
$ / BSH
14.72
14.5175
14.555
-0.005
-0.03%
MAY ’23 SOYBEANS
$ / BSH
14.7225
14.5275
14.5575
-0.0125
-0.09%
JUL ’23 SOYBEANS
$ / BSH
14.6975
14.53
14.54
-0.0025
-0.02%
AUG ’23 SOYBEANS
$ / BSH
14.4575
14.2975
14.2975
-0.01
-0.07%
SEP ’23 SOYBEANS
$ / BSH
13.9425
#N/A
13.8525
0
0.00%
NOV ’23 SOYBEANS
$ / BSH
13.7875
13.6425
13.665
0.005
0.04%
AN2 ’24 SOYBEANS
$ / BSH
13.7475
13.74
13.74
0.055
0.40%
AR2 ’24 SOYBEANS
$ / BSH
11.5
#N/A
13.5975
0
0.00%
AY2 ’24 SOYBEANS
$ / BSH
13.64
#N/A
13.5475
0
0.00%
OCT ’22 SOYBEAN OIL
$ / LB
69.1
67.9
67.97
-0.69
-1.00%
DEC ’22 SOYBEAN OIL
$ / LB
66.39
65.09
65.17
-0.79
-1.20%
OCT ’22 SOY MEAL
$ / TON
434
428.1
433.1
3.5
0.81%
DEC ’22 SOY MEAL
$ / TON
424.9
420.2
423.8
2.1
0.50%
JAN ’23 SOY MEAL
$ / TON
419.2
414.9
417.8
1.4
0.34%
MAR ’23 SOY MEAL
$ / TON
411.6
407.4
410.1
1.2
0.29%
MAY ’23 SOY MEAL
$ / TON
408.1
404.6
406.2
1
0.25%
DEC ’22 Chicago SRW
$ / BSH
8.6125
8.375
8.395
-0.2025
-2.36%
MAR ’23 Chicago SRW
$ / BSH
8.75
8.5325
8.55
-0.1975
-2.26%
MAY ’23 Chicago SRW
$ / BSH
8.82
8.6425
8.6425
-0.1975
-2.23%
JUL ’23 Chicago SRW
$ / BSH
8.7375
8.56
8.56
-0.1975
-2.26%
SEP ’23 Chicago SRW
$ / BSH
8.7
8.6325
8.6325
-0.135
-1.54%
DEC ’23 Chicago SRW
$ / BSH
8.76
8.6775
8.6975
-0.125
-1.42%
AR2 ’24 Chicago SRW
$ / BSH
8.735
8.735
8.735
-0.07
-0.80%
DEC ’22 Kansas City HRW
$ / BSH
9.34
9.1375
9.1525
-0.2
-2.14%
MAR ’23 Kansas City HRW
$ / BSH
9.33
9.135
9.135
-0.2075
-2.22%
MAY ’23 Kansas City HRW
$ / BSH
9.3125
9.19
9.19
-0.1475
-1.58%
JUL ’23 Kansas City HRW
$ / BSH
9.175
9.0375
9.0375
-0.175
-1.90%
SEP ’23 Kansas City HRW
$ / BSH
9.15
#N/A
9.16
0
0.00%
DEC ’23 Kansas City HRW
$ / BSH
9.18
9.18
9.18
-0.0225
-0.24%
AR2 ’24 Kansas City HRW
$ / BSH
0
#N/A
9.135
0
0.00%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.38
9.2525
9.2725
-0.115
-1.23%
MAR ’23 MLPS Spring Wheat
$ / BSH
9.41
9.33
9.33
-0.125
-1.32%
MAY ’23 MLPS Spring Wheat
$ / BSH
9.5
9.5
9.5
-0.0125
-0.13%
JUL ’23 MLPS Spring Wheat
$ / BSH
9.475
#N/A
9.5
0
0.00%
SEP ’23 MLPS Spring Wheat
$ / BSH
9.11
#N/A
9.2
0
0.00%
DEC ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
9.18
0
0.00%
AR2 ’24 MLPS Spring Wheat
$ / BSH
0
#N/A
8.5825
0
0.00%
SEP ’21 ICE Dollar Index
$
110.08
109.54
109.945
0.209
0.19%
OC ’21 Light Crude
$ / BBL
86.22
82.61
82.72
-2.39
-2.81%
NO ’21 Light Crude
$ / BBL
85.88
82.27
82.4
-2.36
-2.78%
OCT ’22 ULS Diesel
$ /U GAL
3.2269
3.1314
3.1438
-0.0287
-0.90%
NOV ’22 ULS Diesel
$ /U GAL
3.1873
3.094
3.1084
-0.0279
-0.89%
OCT ’22 Gasoline
$ /U GAL
2.43
2.3384
2.3441
-0.0716
-2.96%
NOV ’22 Gasoline
$ /U GAL
2.3895
2.3
2.305
-0.0703
-2.96%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
179.2
0
0.00%
OCT ’22 Feeder Cattle
$ / CWT
0
#N/A
181.25
0
0.00%
CT2 ’21 Live Cattle
$ / CWT
0
#N/A
145.5
0
0.00%
DE ’21 Live Cattle
$ / CWT
0
#N/A
150.975
0
0.00%
OCT ’22 Live Hogs
$ / CWT
0
#N/A
96.9
0
0.00%
DEC ’22 Live Hogs
$ / CWT
0
#N/A
87.975
0
0.00%
SEP ’22 Class III Milk
$ / CWT
19.88
#N/A
19.88
0
0.00%
OCT ’22 Class III Milk
$ / CWT
21.45
21.35
21.39
-0.06
-0.28%
NOV ’22 Class III Milk
$ / CWT
21.36
21.27
21.27
-0.15
-0.70%
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