Morning report: Corn, wheat trade lower on financial market weakness due to global inflationary pressures and recession fears. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 2-4 cents
Soybeans up 3-7 cents; Soymeal up $3.50/ton; Soyoil up $0.05/lb
Chicago wheat down 14-15 cents; Kansas City wheat down 10-12 cents; Minneapolis wheat down 9-10 cents
*Prices as of 7:10am CDT.
Feedback from the Field updates! It’s the busiest time of year across the Heartland as farmers finish up planting spring 2022 crops and begin crop protection activities over the next few weeks. While our FFTF responses have trended lower over the past week, we are still receiving valuable insights from farm country.
I have recently updated our survey to reflect current growing conditions, so you can share updated crop progress from your area as often as you would like through the survey portal!
Just click this link to take the survey and share updates about your farm’s spring 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 futures prices shed $0.02-$0.04/bushel overnight despite declining corn condition ratings. Traders suggested to Reuters overnight that this morning’s selloff was likely due to an excessive rise in prices and was likely correlated to broader weakness currently at play in the financial markets due to global inflationary pressures and looming recession fears.
Yesterday’s Crop Progress report from USDA found 97% of anticipated 2022 corn acres planted as of last Sunday, which means that yesterday’s report will be the last of the season that reports on corn planted acreage. The figure aligned exactly with the five-year average.
Focus turned to emergence rates and condition ratings. At 88% emerged as of June 12, the 2022 crop’s development is a mere percentage point behind the five-year average. Hot temperatures across the Heartland this week will likely see the corn emergence value accelerate by next week’s report.
Condition ratings declined slightly on the week, falling 1% to 72% good to excellent as of June 12. But the crop is still in good shape in relative terms – a year ago, 68% of 2021 corn was rated in good to excellent condition.
Bryce Knorr reminds readers in the latest Ag Marketing IQ column that it is still very early in the growing season to be deriving yield estimates from condition ratings. “Last year’s initial conditions looked even better, with 76% good or excellent,” Knorr observes. “By November that tally was down to 60%, and final yields came in only slightly better than average.”
Following Crop Progress condition rating trends is typically a safer bet for yield modeling. With blistering temperatures expected across the Heartland this week, a continued downward shift in ratings in next week’s report could have a stronger price impact on markets in a week’s time.
Soybeans
Soybean prices bucked the morning’s bearish sentiments as bargain buyers swooped in to take advantage of yesterday’s market selloff. Soybean futures traded $0.05-$0.07/bushel higher this morning on the sentiments, which were also bolstered by unseasonably high export demand. Potential heat stress on young crops this week also helped power some of the morning’s gains.
Soybean planting progress rose 10% on the week to align with the five-year average at 88% complete as of June 12. Indeed, much of the remaining acreage left to be planted is likely on double crop rotations that is waiting for winter wheat to be harvested.
Soybean emergence rates continue to suffer the pain of a cool and wet start to the season. Through the week ending June 12, emergence rates rose 14% to 70%. That total still lags behind the five-year average of 74% due to unseasonal planting weather. But this week’s heat wave could coax along growth for the young plants.
More notably in yesterday’s Crop Progress report, USDA issued the first condition ratings for soybean crops of the 2022 growing season. As of last Sunday, USDA found 70% of anticipated 2022 soybean acres to be in good to excellent condition. A year ago, that value stood at 62% good to excellent.
A great start to the 2022 soybean growing cycle could pay big dividends for growers this fall. Again, while it is still too early to determine yields from condition ratings, the strong start will likely increase producer confidence in 2022 yield prospects.
Wheat
Wheat prices fell $0.09-$0.14/bushel overnight as Ukraine’s wheat harvest picks up. The war-torn country is expected to harvest smaller wheat and corn crops this year, keeping the morning’s losses at a cap. A weaker dollar and a heat wave in Europe also helped to limit losses this morning.
Australia is expected to finish planting its largest-ever winter wheat crop in the coming days, totaling 35.7 million acres for the 2022/23 season, according to Australian brokerage IKON commodities. The crop is expected to be a third straight bumper harvest, but some concerns still are still lingering.
“As the next round of (sanctions on Russia) come into force, there is a lot of caution among farmers about what this will mean for the longer term, which is flowing through to lower levels of optimism,” Rabobank Australia chief executive Peter Knoblanche told Reuters.
“The cost pressure is not easing and producers definitely need those higher commodity prices in order to meet rising input costs.”
A Rabobank study found 50% of Australian growers expect to face negative financial impacts from the Ukrainian war. Optimism surrounding the war waned with only 28% of producers expecting an improvement to the business environment over the next year, down 3% from the previous quarter.
Rising input costs, particularly for fuel, fertilizers, and equipment., and global inflationary pressures are the biggest barriers to success for Australian farmers this year.
Winter wheat heading progress is rapidly approaching completion, though heavy rains in the Plains over the past couple weeks has slowed maturation rates. According to yesterday’s Crop Progress report from USDA, 86% of the country’s winter wheat crop was headed out as of June 12 – a 7% increase on the week.
But recent rains have slowed maturation gains. The five-year average for heading progress for the same reporting week stands at 90%.
To that end, harvest continues to lag behind historical benchmarks across the Southern Plains. As of June 10, 10% of the crop had been harvested, up 5% from the previous week but 2% lower than the five-year average.
Condition ratings improved 1% to 31% good to excellent as of Sunday, but it likely matters little as the crop establishes maturity and is harvested.
A few consecutive days of clear skies in the Northern Plains last week helped spring wheat growers in North Dakota and Minnesota to catch up on spring wheat planting progress. Through the week ending June 12, 94% of anticipated 2022 spring wheat acreage had been planted, up a staggering 12% from the previous week thanks to the clear skies.
Planting progress remains woefully behind the five-year average for the same time period (99% complete), but it was probably the best Crop Progress showing spring wheat planting has had in North Dakota and Minnesota all season.
Emergence rates continue to follow the severe planting delays incurred by Minnesota and North Dakota. As of last Sunday, 72% of the freshly planted spring wheat crop had emerged, up 17% from the previous week, but still trailing the five-year average benchmark of 93% for the same time period.
It was also the first week USDA reported spring wheat condition ratings. Through last Sunday, 54% of the crop was rated as good to excellent, which is an improvement from last year’s drought-battered start (37% good to excellent) during the same time. However, the cool and wet start to the season has made for less than idyllic early growing conditions for the 2022 spring wheat crop, which will need more heat to catch up to more favorable ratings.
Weather
Heat is going to continue blistering the Plains today, according to NOAA’s short-range forecasts. Temperatures in the Dakotas will likely be more palatable for young crops.
Scattered showers and thunderstorms are expected to trickle through the Northern Plains this afternoon and tomorrow morning, dropping up to 0.5-1.5 inches of precipitation along the way.
NOAA’s 6- to 10-day forecasts updated yesterday are trending hot for the Heartland but with above average chances of moisture for the Mountain West (!) while the 8- to 14-day forecast is showing dry and warm conditions across the country.
Financials
Bargain buyers were on track to power a higher start to today’s trading session this morning, lifting the S&P 500 index 0.33% higher to $3,765.75 at last glance after yesterday’s selloff from high inflationary concerns pushed the index into bear market territory (a 20% decline from the most recent peak).
The Federal Reserve begins its two-day Federal Open Market Committee (FOMC) meeting today. At its conclusion tomorrow, markets expect it will increase interest rates by 0.75%. Fed chairman Jerome Powell had previously indicated that all future rate hikes would not be more than 0.25% after a 0.5%-increase after the early May 2022 FOMC meeting.
But that was before inflation continued to spiral during May, when it reached a four-decade peak of 8.6% after slightly abating in April. The Fed is likely to step up its aggressiveness in fighting inflation over the next couple days and that will likely take a bite out of any gains the market earns this morning.
My husband checked out his 401(k) balance yesterday – after I explicitly told him not to do so. I hope none of you fared a similar depressive fate.
What else I’m reading this morning on our website, FarmFutures.com:
Bryce Knorr implores you to not get too hung up on USDA’s corn ratings too early in the season.
Our team’s June 2022 WASDE coverage!
“Look but don’t touch,” is increasingly becoming the theme of the market volatility surrounding Ukrainian grain, writes AgMarket.Net’s Brian Splitt.
In the latest South American Crop Watch, Julio Bravo provides a closer look at Brazil’s safrinha corn harvest.
Naomi Blohm encourages corn producers to take advantage of the recent corn market rally , noting a seasonal tendency for December corn futures to drop shortly after the June USDA report into “late June.”
Morning Ag Commodity Prices – 6/14/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.6775
7.6
7.6525
-0.04
-0.52%
SEP ’22 CORN
$ / BSH
7.315
7.2225
7.2825
-0.025
-0.34%
DEC ’22 CORN
$ / BSH
7.2275
7.1275
7.195
-0.02
-0.28%
MAR ’23 CORN
$ / BSH
7.275
7.1775
7.245
-0.02
-0.28%
MAY ’23 CORN
$ / BSH
7.2925
7.195
7.2625
-0.0175
-0.24%
JUL ’23 CORN
$ / BSH
7.26
7.165
7.225
-0.025
-0.34%
SEP ’23 CORN
$ / BSH
6.75
6.6875
6.72
-0.02
-0.30%
JUL ’22 SOYBEANS
$ / BSH
17.225
17.025
17.1425
0.0675
0.40%
AUG ’22 SOYBEANS
$ / BSH
16.425
16.2225
16.345
0.0675
0.41%
SEP ’22 SOYBEANS
$ / BSH
15.665
15.4725
15.605
0.0725
0.47%
NOV ’22 SOYBEANS
$ / BSH
15.4425
15.26
15.37
0.0325
0.21%
JAN ’23 SOYBEANS
$ / BSH
15.46
15.3
15.41
0.0375
0.24%
MAR ’23 SOYBEANS
$ / BSH
15.3325
15.17
15.2825
0.0425
0.28%
MAY ’23 SOYBEANS
$ / BSH
15.2825
15.1325
15.2375
0.0475
0.31%
JUL ’23 SOYBEANS
$ / BSH
15.2425
15.09
15.2125
0.0575
0.38%
AUG ’23 SOYBEANS
$ / BSH
0
#N/A
14.8925
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
80.07
79
79.56
0.05
0.06%
AUG ’22 SOYBEAN OIL
$ / LB
77.94
76.8
77.41
0.1
0.13%
JUL ’22 SOY MEAL
$ / TON
419.3
413.5
418.6
3.5
0.84%
AUG ’22 SOY MEAL
$ / TON
408.7
404
408.2
2.5
0.62%
SEP ’22 SOY MEAL
$ / TON
400.6
396.4
399.8
1.3
0.33%
OCT ’22 SOY MEAL
$ / TON
394.3
390.6
392.9
0.6
0.15%
DEC ’22 SOY MEAL
$ / TON
395.4
391.6
394.5
1
0.25%
JUL ’22 Chicago SRW
$ / BSH
10.7275
10.5275
10.57
-0.14
-1.31%
SEP ’22 Chicago SRW
$ / BSH
10.88
10.6775
10.7225
-0.1375
-1.27%
DEC ’22 Chicago SRW
$ / BSH
11.025
10.83
10.87
-0.135
-1.23%
MAR ’23 Chicago SRW
$ / BSH
11.1275
10.9525
10.975
-0.1325
-1.19%
MAY ’23 Chicago SRW
$ / BSH
11.1725
10.9775
10.99
-0.1575
-1.41%
JUL ’22 Kansas City HRW
$ / BSH
11.6175
11.4575
11.505
-0.1125
-0.97%
SEP ’22 Kansas City HRW
$ / BSH
11.6825
11.525
11.5725
-0.115
-0.98%
DEC ’22 Kansas City HRW
$ / BSH
11.77
11.6225
11.6725
-0.1025
-0.87%
MAR ’23 Kansas City HRW
$ / BSH
11.7975
11.685
11.7
-0.12
-1.02%
MAY ’23 Kansas City HRW
$ / BSH
11.7375
#N/A
11.7625
0
0.00%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.2175
12.075
12.1175
-0.1
-0.82%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.22
12.08
12.1175
-0.1
-0.82%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.2225
12.0725
12.11
-0.0975
-0.80%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.17
12.115
12.1575
-0.0775
-0.63%
MAY ’23 MLPS Spring Wheat
$ / BSH
12.1825
#N/A
12.21
0
0.00%
SEP ’21 ICE Dollar Index
$
105.12
104.48
104.91
-0.056
-0.05%
JU ’21 Light Crude
$ / BBL
122.37
120.38
121.43
0.5
0.41%
AU ’21 Light Crude
$ / BBL
119.66
117.73
118.76
0.51
0.43%
JUL ’22 ULS Diesel
$ /U GAL
4.3511
4.2488
4.3214
0.038
0.89%
AUG ’22 ULS Diesel
$ /U GAL
4.2408
4.143
4.2131
0.0346
0.83%
JUL ’22 Gasoline
$ /U GAL
4.0931
4.0074
4.0585
0.0232
0.57%
AUG ’22 Gasoline
$ /U GAL
3.9413
3.8616
3.913
0.0201
0.52%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
171.325
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
173.6
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
134
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
133.875
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
108
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
106.675
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.34
24.28
24.34
0.04
0.16%
JUL ’22 Class III Milk
$ / CWT
24.59
24.42
24.42
-0.01
-0.04%
AUG ’22 Class III Milk
$ / CWT
24.54
24.52
24.54
0.03
0.12%
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