Afternoon report: Corn, soybean and wheat prices all trend lower to start the week
Some grain prices tested modest gains in overnight trading, but everything was in the red by the close on Monday after a broad round of technical selling and profit-taking. Soybeans suffered the biggest setback, with prices slumping more than 2% lower. Corn and wheat losses were more manageable after most contracts trended 0.25% to 0.75% lower today.
Rainfall will be variable later this week – Iowa, Wisconsin and North Dakota have the best chance for the biggest amounts (around 0.75″) between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Meantime, the weather is definitely hotter than it has been in quite some time. Heat advisories have been issued for large swaths of the Midwest, including areas as far north as Minnesota and the Dakotas. In fact, the heat index for Minneapolis on Tuesday is expected to reach 99 degrees! Make sure you’re staying safe out there and know the warning signs for heat exhaustion and heat stroke.
The bears ran wild again on Wall St. today, with the Dow slumping 682 points lower in afternoon trading to 30,710. High inflation and increasing interest rates have more experts worried a recession may be on the horizon. Energy prices were mixed but mostly lower. Nearby crude oil contracts picked up fractional gains this afternoon to stay just below $121 per barrel. In contrast, diesel dropped 1.75% and gasoline eroded 3.25% lower. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net buyers of corn (+500) and soymeal (+2,000) contracts but were net sellers of soybeans (-13,500) and soyoil (-6,500). Funds were roughly even trading CBOT wheat contracts last Friday.
Corn
Corn prices failed to hold onto modest overnight gains after following a broad range of other commodities (soybeans, in particular) lower today. Worries about intense heat-damaging weather this week kept losses somewhat in check. July futures faded 7.25 cents lower to $7.66, with September futures down 4.75 cents to $16.2675.
Corn basis bids were steady to mixed to start the week, moving as much as 5 cents higher at a Nebraska elevator and as much as 5 cents lower at an Illinois processor on Monday.
Corn export inspections made it to 47.2 million bushels last week, spilling 18% be-low the prior week’s tally. That was also toward the lower end of trade estimates, which ranged between 39.4 million and 68.9 million bushels. China was the No. 1 destination, with 16.3 million bushels. Cumulative totals for the 2021/22 marketing year remain well behind last year’s pace, at 1.770 billion bushels.
Ahead of this afternoon’s crop progress report from USDA, analysts expect to see corn plantings rise from 94% a week ago to 98% through June 12. Quality ratings are expected to hold steady, with 73% of the crop rated in good-to-excellent condition through Sunday.
But consider this – USDA’s quality ratings are a moving target, and data from prior seasons suggest that just because the crop starts strong, doesn’t mean it will stay strong throughout the season, according to grain market analyst Bryce Knorr. “The first nationwide corn ratings for 2022, released June 6, produced plenty of eyeroll emojis, pegging 73% of the crop in good or excellent condition,” he notes. “But history suggests that elevated rating won’t last long. Conditions on average declined 14% from the first to the last scores for the season.” Read more of Knorr’s latest analysis in today’s Ag Marketing IQ blog.
Brazilian governmental data showed that the country exported 45.9 million bushels of corn in May. That was far above May 2021 totals, when Brazil exported less than 550,000 bushels of corn.
Preliminary volume estimates were for 334,693 contracts, shifting slightly above Friday’s final count of 317,445.
Soybeans
Soybean prices fell more than 2% lower on a round of technical selling and profit-taking today. Traders mostly shrugged off a solid round of export inspection data from this morning and generally think USDA will show decent quality ratings when it gives its first glimpse later this afternoon. July futures dropped 37.25 cents to $17.08, with August futures down 35.25 cents to $16.2675.
Soybean basis bids were steady to mixed on Monday after spilling 10 to 30 cents lower at two Midwestern processors while trending 2 cents higher at an Iowa river terminal today.
Soybean export inspections moved ahead of the prior week’s pace to reach 22.2 mil-lion bushels. That was on the very high end of trade estimates, which ranged be-tween 10.1 million and 24.8 million bushels. Mexico was the No. 1 destination, with 6.1 million bushels. Cumulative totals for the 2021/22 marketing year were unable to make up any ground on the prior year’s sizeable lead, meantime, reaching 1.855 billion bushels.
Ahead of the next USDA crop progress report, out later this afternoon, analysts think the agency will show soybean plantings at 90% through June 12, up from 78% a week ago. USDA will also offer an initial look at quality ratings, and analysts expect to see 70% of the crop rated in good-to-excellent condition.
According to the latest governmental data, Brazil’s soybean exports in May fell 29% year-over-year to 390.6 million bushels.
Preliminary volume estimates were for 231,154 contracts, falling slightly below Friday’s final count of 242,724.
Wheat
Wheat prices followed other grains lower amid a choppy session today, while harvest progress is slowly but surely beginning to apply downward pressure on prices. Traders continue to closely monitor the ongoing situation in Ukraine as well. Chicago SRW futures fell 3 cents to $10.6775, July Kansas City HRW futures dropped 6.25 cents to $11.5625, and July MGEX spring wheat futures eased 2.75 cents to $12.1875.
Wheat export inspections improved to 14.3 million bushels last week. That was close to the middle of trade guesses, which ranged between 10.1 million and 18.4 million bushels. Mexico was the top destination, with 2.3 million bushels. Cumulative totals for the young 2022/23 marketing year are off to a slightly sluggish start, reaching 22.6 million bushels since June 1.
Prior to this afternoon’s crop progress report from USDA, analysts expect the agency to show spring wheat plantings at 91% through June 12, up from 82% a week ago. Analysts expect initial crop conditions to come in at 63% rated in good-to-excellent condition, although individual trade guesses cast a wide net that ranged between 50% and 77%.
For winter wheat, analyst think harvest progress will move from 5% a week ago to 14% through Sunday. Crop conditions are expected to firm a point higher, with 31% rated in good-to-excellent condition.
Ukraine’s first deputy agriculture minister estimates that the country’s 2022 wheat harvest will come in between 624.6 million and 734.9 million bushels. Ukraine’s total crop acre footprint is down 25% this year, and 2022 exportable surplus could reach 30 million metric tons.
Italian agricultural lobby Coldiretti said it expects the country’s whet production to fall 15% year-over-year, dropping to 238.8 million bushels of durum and soft wheat combined. The country has been battling plenty of hot, dry weather earlier this season.
Egypt has purchased 143.3 million bushels of wheat from local farmers this season, surpassing last year’s total by 8.3%. The country hopes to source as much as 220.5 million bushels of wheat domestically this year, which would be a substantial increase versus the past two years, if realized. Egypt is the world’s top wheat importer.
Preliminary volume estimates were for 117,746 CBOT contracts, moving slightly above Friday’s final count of 112,411.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
782.25
758.5
769.25
-7.25
22-Sep
740.5
718.25
730.75
-4.75
Soybeans
22-Jul
1757
1702
1707.5
-37.25
22-Sep
1591.75
1539.75
1553.25
-32
Soymeal $/ton
22-Aug
418.9
405.2
405.7
-12.2
Soyoil cents/lb
22-Aug
78.7
76.62
77.31
-1.34
Wheat $/bushel
22-Jul
1093.5
1053.5
1071
-3
22-Sep
1107.75
1068
1086
-2
KC Wheat
22-Jul
1183
1146.5
1161.75
-6.25
22-Sep
1190
1153
1168.75
-5.5
MPLS Wheat
22-Jul
1237.5
1210
1221.75
-2.75
22-Sep
1237
1210
1221.75
0
Live Cattle cents/lb
22-Jun
135.55
132.5
134
-2.2
Feeder Cattle cents/lb
22-Sep
175.45
171.775
173.6
-2.45
Lean Hogs cents/lb
22-Jul
107.2
103.525
106.75
1.275
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jul
122.25
117.47
120.48
-0.19
Diesel
22-Jul
4.3762
4.1949
4.2753
-0.0914
Unleaded Gasoline $/gallon
22-Jul
4.1699
3.9723
4.0212
-0.151
Natural Gas
22-Aug
8.968
8.388
8.625
-0.242
U.S. Dollar Index
22-Jun
104.825
104.29
104.785
0.634
Gold $/ounce
22-Jul
1879.5
1822.5
1826.4
-45.1
Copper
22-Jun
4.262
4.19
4.2115
-0.0895
Fertilizer Swaps
(as of 06/10)
DAP Tampa-index
1,105.0
-12.5
DAP-New Orleans
862.6
19.29
Urea-New Orleans
542.9
-63.38
Urea-Middle East
675.0
-24
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
620.6
-35.27
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