Afternoon report: Corn and soybeans also made solid inroads to start the week
Over the weekend, Russia and Ukraine traded a series of deadly infrastructure attacks. Ukraine destroyed a bridge linking Russia and Crimea, and Russia launched multiple missiles on targets in Kyiv and other Ukrainian cities. Those escalations generated fresh concerns about liabilities of Black Sea shipments and caused wheat prices to jump substantially higher on Monday. Some contracts were up as much as 6%. Other grains followed suit – corn captured double-digit gains, while soybeans firmed around 0.5% higher.
A band of showers and thunderstorms will be moving across large portions of the Corn Belt between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Some areas could gather another 1″ or more during this time; however, the Northern Plains may not see any additional moisture for the rest of the week. NOAA’s new 8-to-14-day outlook predicts seasonally cool, dry weather for most of the central U.S. between October 17 and October 23.
On Wall St., the Dow was near-even in afternoon trading, at 29,297 points. Investors are preparing for a big round of corporate earnings reports out later this week, plus updates to the Consumer Price Index that arrive Thursday morning. Energy futures eroded lower today, with crude oil down more than 1.5% to $91 per barrel. Gasoline spilled 4% lower, while diesel dropped 2.5%. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of corn (+5,000), soybeans (+4,500), soymeal (+2,000) and CBOT wheat (+750) contracts and were roughly net even when trading soyoil contracts.
NOTE: In the morning newsletter, we included preview teases for USDA’s next grain export inspection and crop progress reports, which are typically released each Monday. However, even though grain markets are open today, USDA offices are closed due to the federal Columbus Day holiday. Because of this, those reports will be released instead on Tuesday, October 11, instead of earlier incorrect reporting that suggested they would come out on Monday.
Corn
Prices boosted 2% higher on a round of technical buying partly triggered by increasing risks in the Black Sea region. Surging wheat prices lent plenty of additional support. December futures rose 13.75 cents to $6.97, with March futures up 12.75 cents to $7.0375.
Corn basis bids were mostly steady across the central U.S. on Monday but did tilt 5 cents higher at an Illinois processor while trending 4 to 13 cents lower at two other Midwestern locations today.
Due to mostly favorable weather across the central U.S. this past week, USDA is likely to show solid harvest progress in its next crop progress report, out Tuesday afternoon and covering the week through October 9. Harvest pace through October 2 was 20%, mirroring the prior five-year average. Crop quality has held steady for the past two weeks, with 52% rated in good-to-excellent condition.
Have harvest lows already been notched this season? Grain market analyst Bryce Knorr digs into historical price trends in November and December, adding that “in the here-and-now, surviving hedge pressure from harvest could be the key test.” Knorr offers additional analysis in today’s Ag Marketing IQ blog – click here to learn more.
Prior to the Wednesday WASDE report from USDA, analysts think the agency will show 2022/23 global corn stocks easing to 11.867 billion bushels. However, it should be noted that there is a more than 1.2 billion bushel spread between the highest and lowest trade guess.
Thanks to recent dredging operations near Memphis and Stack Island, Miss., two stretches of the Mississippi River were finally reopened to vessel traffic this weekend. The Stack Island area still had a logjam of 22 tow boats hauling nearly 400 barges as of Monday morning, but that should soon be cleared. At one point last week, the queue was comprised of at least 2,000 barges.
Preliminary volume estimates were for 301,846 contracts, moving well above Friday’s final count of 187,998.
Soybean
Prices followed corn and wheat prices higher on Monday, but seasonal harvest pressure and expectations for a record-breaking Brazilian crop capped gains at 0.5%. November futures added 7 cents to $13.74, with January futures up 6.5 cents to $13.8575.
Soybean basis bids were steady to weak across the central U.S. on Monday after trending as much as 15 cents lower at an Illinois river terminal land falling 2 to 10 cents at four other Midwestern locations today.
Ahead of Wednesday’s WASDE report from USDA, analysts think the agency will slightly raise 2022/23 global soybean stocks to 3.675 billion bushels. September’s global ending stocks were at 3.635 billion bushels, according to USDA.
How are your crops looking this week? Is harvest progressing as planned? Click this link to take the survey and share updates about your farm’s crop development. Farm Futures grain market analyst Jacqueline Holland regularly reviews and uploads results to the FFTF Google MyMap, so farmers can keep current with peer anecdotes from around the country.
Brazilian soybean plantings for the 2022/23 season are at 9.6%, which is slightly below 2021’s pace of 10.1% amid some “erratic weather” that is keeping some equipment out of fields, according to the country’s Agrural consultancy. “Constant rains and high humidity continue to predominate in Parana, Santa Catarina and Mato Grosso do Sul states, preventing further advances of the machines,” Agrural noted in a statement earlier today. Most experts are still predicting a record-breaking effort this season of at least 5.5 billion bushels.
Preliminary volume estimates were for 249,793 contracts, inching fractionally below Friday’s final count of 250,594.
Wheat
Prices captured substantial gains on rising geopolitical unrest in the Black Sea region. (And it cannot be stated enough that combined, Ukraine and Russia typically account for nearly one-third of the world’s entire wheat exports). December Chicago SRW futures jumped 53.75 cents to $9.34, December Kansas City HRW futures climbed 50.5 cents to $10.1925, and December MGEX spring wheat futures rose 41 cents to $10.09.
Prior to USDA’s October WASDE report, out Wednesday morning, analysts expect to see 2022/23 global wheat stocks decline slightly to 9.829 billion bushels. September’s stocks were at 9.868 billion bushels.
Algeria issued an international tender to purchase 1.8 million bushels of soft milling wheat from optional origins that closes on Tuesday. Algeria typically buys more than the nominal amount listed on its tenders. The grain is for shipment in November.
Preliminary volume estimates were for 114,572 CBOT contracts, tracking moderately above Friday’s final count of 65,652.
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