Afternoon report: Corn, soybeans and wheat all firm in Wednesday’s session
Grain prices made it through a choppy session on Wednesday with small to moderate gains by the close. Worries about tight supplies in the United States and export challenges in Ukraine are still front and center, but prices this high are still prone to the occasional round of profit-taking. That didn’t happen today, however. Corn and soybean prices each improved around 0.75%, with most wheat contracts up 0.5%.
Between Thursday and Sunday, most of the central U.S. will see at least some measurable rainfall, but few areas will gather much more than 0.25″ during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally warm and dry conditions for most of the Midwest and Plains between June 15 and June 21.
On Wall St., the Dow shed 352 points in afternoon trading, falling to 32,827 as investors eye possible signs of an economic slowdown, including expectations that the GDP will rise just 0.9% in Q2 of 2022. Energy futures were mostly firm, with crude oil up another 2% to $122 per barrel despite rising domestic supplies. Gasoline was also up 1.5% this afternoon, while nearby diesel contracts retreated slightly lower. Natural gas prices plummeted more than 6.5% lower after reports of a plant explosion in Texas. The U.S. Dollar firmed moderately.
On Tuesday, commodity funds were net buyers of corn (+9,000), soybeans (+7,000), soymeal (+3,000) and soyoil (+1,000) contracts but were net sellers of CBOT wheat (-6,000).
Corn
Corn prices pushed higher for the third consecutive session after another round of technical buying today. Be sure to watch first thing tomorrow for USDA’s next batch of export data – analysts were in some disagreement over expected corn volume (more on that below). July futures added 6.25 cents to $7.6350, while September futures inched 0.25 cents higher to $7.26.
Corn basis bids were steady to firm on Wednesday, jumping as much as 15 cents higher at an Illinois processor and firming 3 to 5 cents at five other Midwestern locations today.
The latest data from the U.S. Energy Information Administration showed ethanol production stayed above the 1-million-barrel-per-day benchmark for the third consecutive week, moving to a daily average of 1.039 million barrels. Stocks increased by nearly 3% to reach 23.64 million barrels.
Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show corn sales ranging between 6.9 million and 43.3 million bushels for the week ending June 2.
Brazil’s Conab is projecting the country’s 2021/22 corn crop will come in around 4.536 billion bushels, which is modestly higher than its prior estimate. Conab also expects to see corn exports at 1.457 billion bushels in the current marketing year.
Importers in the Philippines have purchased 2.1 million bushels of corn in a recent deal that was likely sourced from South America and for shipment in July. Singapore-based traders are expecting the country to make additional purchases in the near future.
Amid historically high prices, the decision on when to buy fuel and fertilizer is an even tougher one this year. “Months that begin with “J” are historically a time to buy, and this year’s prices are at least off all-time highs set earlier this spring,” notes grain market analyst Bryce Knorr. “Still, costs are still plenty expensive. And any decisions now must run a gauntlet of issues after Russia’s invasion of Ukraine that could provoke even more volatility.” Knorr offers fresh analysis on where he thinks prices will head next in a recent Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 442,710 contracts, which was slightly above Tuesday’s final count of 430,599.
Soybeans
Soybean prices firmed moderately higher on tight domestic stocks and hopes that export demand will pick up during the summer months. July futures gained 12.75 cents to $17.41, with August futures up 9.25 cents to $16.63.
Soybean basis bids were steady to mixed on Wednesday – especially at several Midwestern processors, which firmed 10 cents at an Indiana location while tumbling 20 cents lower at an Iowa location today.
Prior to tomorrow’s weekly export report from USDA, analysts think the agency will show soybean sales ranging between 11.0 million and 44.1 million bushels for the week ending June 2. Analysts also expect to see soymeal sales ranging between 150,000 and 320,000 metric tons last week, plus up to 35,000 MT of soyoil sales.
Brazil’s Abiove is estimating that the country’s 2022 soybean production will reach 4.611 billion bushels, inching fractionally higher than the group’s prior estimate. Brazil’s Conab is slightly more bearish, predicting a production of 4.566 billion bushels. Abiove projects soybean exports will come in around 2.829 billion bushels. And soymeal exports are steady from prior estimates of 18.3 million metric tons, with soyoil exports anticipated to reach 2.0 MMT.
Preliminary volume estimates were for 263,805 contracts, firming slightly above Tuesday’s final count of 257,009.
Wheat
Wheat prices couldn’t hold onto double-digit overnight gains but still finished Wednesday’s session in the green after some net technical buying today. July Chicago SRW futures picked up 3.25 cents to $10.75, July Kansas City HRW futures gained 6.75 cents to $11.56, and July MGEX spring wheat futures added 5.5 cents to $12.3275.
Prior to tomorrow morning’s weekly export report from USDA, analysts think the agency will show wheat sales ranging between 6.4 million and 20.2 million bushels for the week ending June 2.
Ukrainian farm union UAC is accusing Russia of stealing around 600,000 metric tons of grain from occupied territories. Some of that grain has been shipped to Syria, while the remainder has been transported to Crimea, according to UAC deputy head Denys Marchuk. These claims have not been substantiated at this time.
Will domestic wheat production shortfalls generate some pricing opportunities moving forward? That’s the opinion of Farm Futures grain market analyst Jacqueline Holland, who offers a fresh round of analysis in her latest E-corn-omics blog – click here to learn more.
Will India’s ban on wheat exports soon draw to a close? Sources today hinted that the country may allow traders to ship another 44 million bushels so it can clear cargoes currently stuck at port. Most of that volume is expected to go to Bangladesh, although several other southeast Asian countries could also be in the mix.
Japan is hoping to purchase 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley in a simultaneous buy-and-sell auction that will be held next week. The grain is for arrival in late November.
Jordan issued a new international tender to purchase 4.4 million bushels of milling wheat from optional origins after failing to close a deal on a similar tender from earlier this week. Offers can be submitted through June 14, and the grain is for shipment in September and October.
Preliminary volume estimates were for 135,005 CBOT contracts, falling moderately short of Tuesday’s final count of 176,891.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
774
756
764.5
6.5
22-Sep
734.75
723
727.75
0.25
Soybeans
22-Jul
1758
1726.5
1740
12.75
22-Sep
1599
1574.25
1588.5
13.75
Soymeal $/ton
22-Aug
415.6
406
407.7
-2.8
Soyoil cents/lb
22-Aug
81.38
79.63
80.96
1.45
Wheat $/bushel
22-Jul
1089
1061.75
1074.75
3.25
22-Sep
1101.75
1075.5
1088.25
4.25
KC Wheat
22-Jul
1168
1141.75
1155
6.75
22-Sep
1175
1149.25
1162.25
7.25
MPLS Wheat
22-Jul
1243.25
1220.5
1234.5
5.5
22-Sep
1241
1219.75
1233.75
7.25
Live Cattle cents/lb
22-Jun
136.9
134.3
136.65
2.925
Feeder Cattle cents/lb
22-Sep
178.375
174.175
177.575
2.825
Lean Hogs cents/lb
22-Jul
110.6
105.2
106.6
-2.675
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jul
123.18
119.3
121.86
2.45
Diesel
22-Jul
4.3512
4.28
4.3191
-0.0015
Unleaded Gasoline $/gallon
22-Jul
4.253
4.0822
4.206
0.0483
Natural Gas
22-Aug
9.645
8.447
8.635
-0.643
U.S. Dollar Index
22-Jun
102.78
102.265
102.545
0.22
Gold $/ounce
22-Jul
1859.1
1844.4
1853
5.5
Copper
22-Jun
4.447
4.412
4.447
0.0075
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
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