Afternoon report: Soybeans pick up modest gains in Wednesday’s session
We’re now halfway through a holiday-shortened week of trading, and corn and wheat prices continued to erode lower during Wednesday’s session after another round of technical selling on planting pressure in the U.S. and export hopes in Ukraine. Corn prices spilled more than 3% lower, and some wheat contracts lost more than 4% today. Soybeans bucked the overall trend, overcoming midday losses to finish the session modestly higher.
Most of the central U.S. will see at least some measurable moisture between Thursday and Sunday, but very few areas will gather more than 0.5″ during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet weather for the eastern Corn Belt between June 8 and June 14, with widespread cooler-than-normal conditions across the Midwest and Plains.
On Wall St., the Dow shifted 80 points lower in afternoon trading to 32,903, with plenty of worries about the country’s economic health preventing a comeback from a selloff earlier this year. Energy futures continued to march higher today, with crude oil up another 0.5% to stay above $115 per barrel. Diesel jumped 55 higher, with gasoline up another 4%. The U.S. Dollar firmed significantly.
On Tuesday, commodity funds were net sellers of all major grain contracts, including corn (-23,500), soybeans (-14,500), soymeal (-8,000), soyoil (-3,500) and CBOT wheat (-21,000).
Corn
Corn prices slumped more than 3% lower on another round of technical selling largely spurred by better-than-expected planting progress this past week, which mostly erased a slower-than-normal start earlier this spring. July futures dropped 23.75 cents to $7.2975, with September futures down 22.25 cents to $7.0275.
Corn basis bids were steady to firm on Wednesday after rising 3 to 5 cents higher across three Midwestern locations today. Farmer sales have been generally slow so far this week.
Corn plantings reached 86% through Sunday, up from 72% a week ago and slightly better than the average trade guess of 85%. That’s still eight points behind 2021’s pace of 94% but just a point below the prior five-year average of 87%. And 61% of the crop is now emerged, up from 39% a week ago and seven points short of the prior five-year average of 68%.
Following a report that the Biden administration will likely raise 2021 biofuel blending mandates, U.S. renewable fuel credit prices shot up 11% earlier today, with D6 credits moving from $1.35 apiece up to $1.50. Annual U.S. ethanol consumption is just under 14 billion gallons.
Ukraine’s grain traders union UGA estimates that the country will produce 1.028 billion bushels this season, versus year-ago results of 1.480 billion bushels – a decline of almost 31%, if realized. The country is expected to face significant production and export disruptions amid the ongoing Russian invasion. Ukraine is among the world’s top suppliers of both corn and wheat.
Brazil’s Anec estimates that the country’s May corn exports reached 42.9 million bushels, which was 14.4% below the group’s prior estimate it made a week earlier. Anec also estimates that Brazilian wheat exports came in at 4.0 million bushels last month.
Trade advocates convened at a recent townhall meeting to discuss the importance of re-engaging in southeast Asia – the home to many important U.S. trade partners. “There can be no region more important to America’s economic future, and frankly national security and the global future, than the Indo-Pacific region,” according to former U.S. Senator Max Baucus. Farm Futures policy editor Jacqui Fatka offers additional details here.
Preliminary volume estimates were for 454,594 contracts, moving well above Tuesday’s final count of 319,523.
Soybeans
Soybean prices were able to shake off spillover weakness from corn and wheat to finish Wednesday’s session with modest gains after some net technical buying today. A flash sale to China announced this morning lent some assistance by boosting export optimism. Soyoil prices were also in the green today, with soymeal prices losing around 0.5%. July soybean futures firmed 6.25 cents to $16.8950, with August futures picking up 3.25 cents to $16.2350.
Soybean basis bids were largely unchanged across the central U.S. on Wednesday but did tilt 10 cents lower at an Illinois processor today.
Private exporters reported to USDA the sale of 4.9 million bushels of soybeans to China. Half of the total is for delivery during the current marketing year, which began September 1, with the remainder for delivery in 2022/23.
Two-thirds (66%) of this year’s soybean crop is now in the ground, up from 50% last week and just below the average trade guess of 67%. It’s also behind 2021’s pace of 83% and the prior five-year average of 67%. Nearly four of every 10 soybean acres (39%) are now emerged, up from 21% a week ago and remaining below both 2021’s pace of 59% and the prior five-year average of 43%.
Brazil’s Anec estimates that the country’s soybean exports in May reached 394.3 million bushels. That is 4.9% below the group’s prior estimate, issued a week ago. Anec also projects there were 1.854 million metric tons of Brazilian soymeal exports in May.
“In the context of developing and implementing a risk management strategy, what have we learned the past few months that can help you to be successful with your marketing this summer?” That is a critical question Brian Basting, commodity research analyst with Advance Trading, is asking in yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 186,359 contracts, sliding moderately below Tuesday’s final count of 231,082.
Wheat
Wheat prices sank significantly lower again on Wednesday amid hopes that Ukraine will be able to soon ramp up its exports, which led to a round of technical selling that pushed most contracts 3.25% to 4.25% lower today. July Chicago SRW futures tumbled 46.25 cents to $10.4125, July Kansas City HRW futures fell 37.75 cents to $11.2775, and July MGEX spring wheat futures lost 55 cents to $11.9250.
Spring wheat plantings made it to 73% through Sunday, up from 49% last week and much better than the average trade guess of 67%. Four of the top six production states are virtually complete, while Minnesota (53%) and North Dakota (59%) still have a ways to go. And 42% of the crop is now emerged, versus 29% a week ago.
Winter wheat quality ratings improved a point, as expected, with 29% of the crop in good-to-excellent condition through May 29. Another 31% is rated fair (down a point from last week), with the remaining 40% rated poor or very poor (steady from last week). Physiologically, 72% of the crop is now headed, up from 63% last week. That’s a few points short of 2021’s pace of 77% and the prior five-year average of 76%.
The Ukrainian grain traders union UGA reports that it expects the country’s 2022 wheat harvest to plummet 42% from year-ago results, falling to 705.5 million bushels this season. Total grain exports have languished over the past two months, with 1.1 million metric tons in April and 1.06 MMT in May.
Egypt received two offers in its tender to purchase 2.0 million bushels of wheat from Russia that closed earlier today. The grain is for shipment starting in late July once the purchase is finalized.
Preliminary volume estimates were for 147,096 CBOT contracts, shifting 16% above Tuesday’s final count of 126,453.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
756.25
720.5
731.25
-23.75
22-Sep
728.25
694.75
703.75
-22.25
Soybeans
22-Jul
1706.5
1675.25
1690.25
6.25
22-Sep
1569
1540
1550.25
4.75
Soymeal $/ton
22-Aug
415.4
405.8
407.1
-3
Soyoil cents/lb
22-Aug
77.33
75.21
76.74
0.45
Wheat $/bushel
22-Jul
1098
1027.25
1041.25
-46.25
22-Sep
1106.75
1037.5
1052.25
-45.5
KC Wheat
22-Jul
1177.5
1112.5
1128.25
-37.75
22-Sep
1183
1119.5
1135.25
-37.25
MPLS Wheat
22-Jul
1260.5
1190
1197
-55
22-Sep
1260.5
1190
1197.25
-54.5
Live Cattle cents/lb
22-Jun
132.925
130.925
132.85
2.325
Feeder Cattle cents/lb
22-Sep
172.775
168.025
172.55
4.425
Lean Hogs cents/lb
22-Jul
112.75
108.7
112.475
4.475
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
117.87
114.58
115.4
0.73
Diesel
22-Jun
4.1716
3.9702
4.1304
0.1954
Unleaded Gasoline $/gallon
22-Jun
4.1028
3.9373
4.0777
0.1615
Natural Gas
22-Aug
8.756
8.143
8.721
0.583
U.S. Dollar Index
22-Jun
102.75
101.77
102.505
0.739
Gold $/ounce
22-Jul
1850
1827.9
1847.1
4.4
Copper
22-Jun
4.346
4.28
4.33
0.035
Fertilizer Swaps
(as of 05/27)
DAP Tampa-index
1,117.5
0
DAP-New Orleans
917.7
-2.76
Urea-New Orleans
642.1
-49.6
Urea-Middle East
720.0
11.5
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
683.4
-5.51
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
