Morning report: Black Sea uncertainty helps to propel corn gains as wheat falters on a stronger dollar. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 2-4 cents
Soybeans up 1-2 cents; Soymeal down $1.80/ton; Soyoil up $0.26/lb
Chicago wheat down 5-6 cents; Kansas City wheat down 9-11 cents; Minneapolis wheat down 2-4 cents
*Prices as of 7:05am CDT.
Feedback from the Field updates! Corn planting progress may be slowing down in the Heartland, but growers in the Upper Midwest are weighing prevent plant options, according to responses from growers in our latest Feedback from the Field column.
“No corn this year,” shared a Minnesota producer. “We are too far behind the calendar, in my opinion, for the crop to complete maturity.”
“Time for prevent plant,” echoed a Wisconsin corn grower.
Want to see how your farm’s progress stacks up against other growers across the country? 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!
Ukraine
Infrastructure damage will likely limit how much grain Ukraine can ship even if the Russian naval blockade is lifted in the Black Sea. Ukraine’s newly minted deputy minister of Agrarian Policy and Food, Taras Vysotskyi, said overnight that the embattled country will only be able to ship a maximum of 2 million metric tonnes (MMT) of grain per month if Russian warships allow for safe cargo transport in the Black Sea.
Ukraine is currently shipping around 1 MMT of grain out the country per month, largely via truck and rail routes, which limit volumes and transport speed. Prior to Russia’s invasion, Ukraine could ship up to 6MMT of grain per month out of its Black Sea terminals. It is estimated that 20 MMT of grain remain trapped in Ukraine.
“I think we reached the limit. The biggest amount we can export is about 2 million tonnes a month,” Vysotskyi said in a virtual meeting with the International Grains Council (IGC) conference in London.
Ukraine’s grain and oilseed exports rose 80% in May 2022 from the previous month to about 1.743 MMT according to data released by the agricultural ministry overnight. Corn shipments made up the largest volume of the total, accounting for 949k MT (37.4M bu.).
Increased export capacity on the Danube River ports has helped allow grain to flow into Romanian Black Sea export terminals. Up to that point in the war, most of the country’s grain shipments flowed through rail lines and truck routes. The Danube River option appears to be Ukraine’s best hope for grain shipments, though the volumes are likely to continue lagging behind Black Sea loading capacities.
Corn
Corn prices wavered between losses and gains this morning as markets digested a better-than-expected start to 2022 corn conditions and ongoing logistical issues in the Black Sea. The latter of the two issues seemed to be having the stronger effect on prices, lifting corn futures up $0.02-$0.03/bushel at last glance.
Yesterday’s Crop Progress report was eagerly anticipated by markets as it provided the first look at 2022 corn crop condition ratings. USDA’s results came in better than expected after a rough start to the 2022 growing season after a cold and wet spring in the Heartland, providing slightly bearish price sentiment in the corn market this morning.
But for growers who struggled to get planted earlier this spring, the favorable ratings report was comforting news especially for producers who may be looking to book sales amid lucrative 2022 futures pricing.
USDA reported that 73% of the U.S. corn crop was in good to excellent shape as of June 5, 5% higher than the average pre-report analyst estimate. Those guesses varied widely, ranging between 60%-76% good to excellent prior to the report’s release.
Corn planting progress is now 94% complete across the country as of last Sunday, including prevent plant acreage. It marked an 8% increase from the previous week, moving 2% ahead of the five-year average for the first time this growing season thanks to several days of clear weather in the Northern Plains.
Last week’s sunny skies in the region – as well as prevent plant allocations – helped corn planting progress in Minnesota to accelerate 11% from the previous week to 93% complete as of June 5, just 3% behind the five-year average. Similarly, North Dakota’s plating progress moved 25% higher from last week to 81% complete, 11% lower than the five-year benchmark for the same reporting period.
With planting largely finished for the year, crop condition ratings will become the market’s primary focus in the coming weeks. Emergence rates (78% as of June 5) continue to rise (up 17% from last week) and will accelerate closer to the five-year average benchmark (81% as of June 5) this week if temperatures trend high and forecasted showers in the Upper Midwest stay light.
Soybeans
Soybean prices edged $0.01–$0.02/bushel higher overnight on planting delays in the Northern Plains. Showers forecast across the Heartland this week had a mixed effect on the soy complex. Early planted soy crops are likely to benefit from the moisture, but the showers could also stall planting progress in the beleaguered Northern Plains.
Top global palm oil producer and exporter Indonesia is relaxing its maximum palm oil export tax and tariffs in hopes of boosting exports. It was welcome news for the global edible oils complex, as palm oil futures were trending higher on lower-than-expected end-of-May inventories and ongoing production struggles in Southeast Asia.
Planting progress continues to be the central focus for soybean markets following yesterday’s Crop Progress report from USDA. Through the week ending June 5, 78% of anticipated 2022 U.S. soybean acres had been planted, up 12% from the previous week and only 1% behind the five-year average.
Markets greeted the metric this morning with mixed sentiments. Pre-report estimates had pegged yesterday’s reading between 77%-85% with an average guess of 80%. So there was some bullish price action afoot as the markets seemingly overestimated planting progress for the week.
Again, North Dakota and Minnesota continue to be the largest holdouts thanks to an unfortunately cool and wet spring, lagging behind the five-year average while most other U.S. states are significantly ahead of the benchmark. Markets are likely to be responsive to weather forecasts in the coming days as crop insurance deadlines approach in the coming days for Minnesota and North Dakota.
Emergence rates are in need of warmer weather, which is likely only the way over the next 10 days. As of June 5, 56% of the soybean crop had emerged, up 17% from the previous week. But a 3% lag behind the five-year average is a nod to cool temperatures across the Heartland last week that prevented further crop development.
Wheat
Wheat prices saw little to no break from a slower than expected start to the 2022 harvesting season overnight, falling $0.03-$0.08/bushel on easing supply concerns in North Africa and a stronger dollar.
Tunisia reported a 10% increase in annual wheat production overnight, reducing its reliance on overseas wheat imports. Egypt also reported sufficient wheat reserves for the next six months.
Ongoing uncertainty about the fate of grain shipments in the Black Sea continued to be the overarching factor moving wheat markets this morning. Moscow and Kyiv traded barbs overnight, casting doubt onto the future of market access in the Black Sea.
“No quick solution to the problem is therefore in sight,” Commerzbank said in a note.
Winter wheat conditions continue to improve thanks to rains last week on the Plains, but it may be too little to late. The 1% ratings increase found June 5 winter wheat conditions at 30% good to excellent, in line with analyst expectations for yesterday’s report.
But the soggy conditions have slowed heading and harvesting rates, particularly in the Southern Plains. USDA reported its first week of winter wheat harvest progress for the 2022 season yesterday, finding 5% of harvest activity complete. The reading was a percentage point behind the five-year average, reflecting the untimely rains that have already slowed harvest progress in the Southern Plains.
Heading rates only advanced 7% on the week to land at 79% on June 5 due largely to last week’s showers and cooler temperatures. The five-year average for the metric stands at 84%.
Spring wheat planting progress rose 9% from the previous week to 82% complete as of June 5. The five-year average benchmark for the same reporting week is 97%, so yesterday’s metric continues to reflect the significant planting delays in North Dakota and Minnesota.
Weather
Scattered showers will linger over the Plains today through tomorrow morning, according to NOAA’s short-range forecasts. The showers will shift east into the Mississippi River Valley and Great Lakes region by late tomorrow morning and into the Eastern Corn Belt by tomorrow afternoon.
Warm temperatures forecast today should help encourage crop development, especially for corn crops and early planted soybeans. Rainfall over the next 24 hours will likely be light, though regions of the Eastern Plains could see up to an inch and a half of accumulation.
NOAA’s 6- to 10-day forecasts updated yesterday are trending warmer for the Upper Midwest while the 8- to 14-day forecast is beginning to show dry and warm conditions for the Eastern Corn Belt.
Financials
Worries about rapidly waning consumer demand weighed market prices lower overnight after Target issued lower profit warnings. The consumer retail giant cited overstocked inventory as the primary reason for tightening profit outlooks, “the latest sign of the sudden supply-and-demand mismatch at U.S. stores,” according to the Wall Street Journal.
Basically, consumers are done buying patio furniture, small appliances, electronics, and home d?cor items that provided retailers lucrative revenues during the pandemic. But these items are largely one-time purchases (at least in an intermediate time span) and rising inflation on more necessary food and fuel purchases is now taking a larger share of the consumer dollar.
Consumer preferences are changing just as quickly as they did at the pandemic’s onset. This may create difficulty for the Federal Reserve in combatting the impacts of inflation. Or it may be a fast track to the metrics the Fed needs to evaluate its interest rate hikes to find the “soft landing” point for the economy that will slow inflation.
More insights will come from the Federal Open Market Committee (FOMC) meeting scheduled for next week, where more interest rate hikes are expected.
S&P 500 futures tumbled 1.01% lower to $4,079 this morning, reversing yesterday’s gains. A larger than expected rate increase from the Reserve Bank of Australia overnight also contributed to morning’s losses. Trade data expected this morning from the U.S. Census Bureau is expected to narrow after showing a record deficit in April 2022.
What else I’m reading this morning on our website, FarmFutures.com
Bryce Knorr points out that summer lows may be in for fuel and fertilizer – and encourages growers to consider locking in input prices for Fall 2022 harvest and the 2023 growing season.
Darren Frye offers growers three helpful tips to ensure a successful marketing plan during times with extreme market volatility.
The U.S. EPA released eagerly anticipated biofuel blending targets last Friday. Policy editor Jacqui Fatka breaks down what that means for ethanol production and corn growers.
Milk prices are strong right now, Naomi Blohm observes. But a clash between supply and demand fundamentals will occur soon.
Roger Wright explains how to use puts to lock in a floor price and enhance hedge-to-arrive pricing.
Morning Ag Commodity Prices – 6/7/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.435
7.35
7.43
0.005
0.07%
SEP ’22 CORN
$ / BSH
7.17
7.08
7.1675
0.025
0.35%
DEC ’22 CORN
$ / BSH
7.0575
6.9675
7.0475
0.0225
0.32%
MAR ’23 CORN
$ / BSH
7.105
7.0175
7.0975
0.025
0.35%
MAY ’23 CORN
$ / BSH
7.115
7.03
7.1125
0.0275
0.39%
JUL ’23 CORN
$ / BSH
7.0775
6.9925
7.07
0.025
0.35%
SEP ’23 CORN
$ / BSH
6.545
6.4675
6.545
0.03
0.46%
JUL ’22 SOYBEANS
$ / BSH
17.055
16.9325
16.9875
-0.005
-0.03%
AUG ’22 SOYBEANS
$ / BSH
16.4125
16.3
16.3475
-0.01
-0.06%
SEP ’22 SOYBEANS
$ / BSH
15.6675
15.5825
15.645
0.01
0.06%
NOV ’22 SOYBEANS
$ / BSH
15.375
15.2825
15.3525
0.0175
0.11%
JAN ’23 SOYBEANS
$ / BSH
15.415
15.3625
15.4025
0.02
0.13%
MAR ’23 SOYBEANS
$ / BSH
15.3375
15.2725
15.32
0.0175
0.11%
MAY ’23 SOYBEANS
$ / BSH
15.3175
15.2675
15.3075
0.015
0.10%
JUL ’23 SOYBEANS
$ / BSH
15.2975
15.235
15.2825
0.0125
0.08%
AUG ’23 SOYBEANS
$ / BSH
10.75
#N/A
15.0225
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
81.77
80.58
81.51
0.32
0.39%
AUG ’22 SOYBEAN OIL
$ / LB
80.01
78.96
79.74
0.25
0.31%
JUL ’22 SOY MEAL
$ / TON
408
405
405.5
-1.6
-0.39%
AUG ’22 SOY MEAL
$ / TON
402
399.7
400.5
-0.8
-0.20%
SEP ’22 SOY MEAL
$ / TON
395.7
394.2
395.1
-0.6
-0.15%
OCT ’22 SOY MEAL
$ / TON
390.9
389.7
390.4
-0.5
-0.13%
DEC ’22 SOY MEAL
$ / TON
392.6
390.6
391.9
-0.4
-0.10%
JUL ’22 Chicago SRW
$ / BSH
11.01
10.805
10.8675
-0.0625
-0.57%
SEP ’22 Chicago SRW
$ / BSH
11.12
10.92
10.98
-0.065
-0.59%
DEC ’22 Chicago SRW
$ / BSH
11.23
11.0375
11.0975
-0.055
-0.49%
MAR ’23 Chicago SRW
$ / BSH
11.225
11.1275
11.18
-0.0625
-0.56%
MAY ’23 Chicago SRW
$ / BSH
11.3225
11.1725
11.225
-0.0575
-0.51%
JUL ’22 Kansas City HRW
$ / BSH
11.77
11.585
11.6025
-0.0975
-0.83%
SEP ’22 Kansas City HRW
$ / BSH
11.835
11.6575
11.6825
-0.085
-0.72%
DEC ’22 Kansas City HRW
$ / BSH
11.935
11.7725
11.7875
-0.0775
-0.65%
MAR ’23 Kansas City HRW
$ / BSH
11.91
11.8325
11.835
-0.0825
-0.69%
MAY ’23 Kansas City HRW
$ / BSH
11.7275
11.7275
11.7275
-0.0825
-0.70%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.4225
12.255
12.265
-0.04
-0.33%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.415
12.2475
12.27
-0.035
-0.28%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.3975
12.2525
12.255
-0.03
-0.24%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.29
12.29
12.29
-0.025
-0.20%
MAY ’23 MLPS Spring Wheat
$ / BSH
12.3325
#N/A
12.2625
0
0.00%
JUN ’21 ICE Dollar Index
$
102.84
102.465
102.805
0.358
0.35%
JU ’21 Light Crude
$ / BBL
119.5
117.72
118.22
-0.28
-0.24%
AU ’21 Light Crude
$ / BBL
117.09
115.39
115.9
-0.16
-0.14%
JUL ’22 ULS Diesel
$ /U GAL
4.4025
4.3083
4.332
-0.0281
-0.64%
AUG ’22 ULS Diesel
$ /U GAL
4.2675
4.1834
4.203
-0.0262
-0.62%
JUL ’22 Gasoline
$ /U GAL
4.2412
4.0996
4.1052
-0.0878
-2.09%
AUG ’22 Gasoline
$ /U GAL
4.0335
3.9133
3.9214
-0.069
-1.73%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
171.975
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
174.55
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
132.825
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
132.9
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
109.225
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
108.975
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.42
24.42
24.42
-0.04
-0.16%
JUL ’22 Class III Milk
$ / CWT
25.01
24.94
25.01
-0.06
-0.24%
AUG ’22 Class III Milk
$ / CWT
24.81
#N/A
24.98
0
0.00%
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