Afternoon report: Corn and soybeans stand firm, while wheat faced moderate cuts on Tuesday
Another day, another volatile session for grain prices. Today’s action benefited corn and soybeans after a round of technical buying benefited each commodity, while most wheat contracts suffered a moderate setback as traders locked in profits. Corn and soybeans each firmed nearly 2% higher today, while winter wheat contracts sank 1.5% lower. Spring wheat finished with narrowly mixed results.
Rains will be variable between today and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Much of Minnesota will remain dry during that time, for example, while parts of Kansas, Missouri and Arkansas could gather another 1.5″ or more. NOAA’s 8-to-14-day outlook predicts seasonally dry conditions for most of the Corn Belt between June 14 and June 20, with warmer-than-normal temperatures likely for the southern half of the country next week.
On Wall St., the Dow trended 153 points higher in afternoon trading to 33,070, although investors were also skittish over Target’s announcement that the retail giant plans to mark down some products and also cancel some orders to trim its inventories. Energy futures were mixed but mostly lower. Crude oil firmed 0.5% to reach $119 per barrel, but diesel dropped 1% and gasoline fell nearly 1.5% this afternoon. The U.S. Dollar softened slightly.
On Monday, commodity funds were net buyers of corn (+13,000) and CBOT wheat (+18,500) contracts but were net sellers of soybeans (-500), soymeal (-1,000) and soyoil (-2,000).
Corn
Corn prices trended higher again on Tuesday as traders shook off better-than-expected quality ratings from USDA and engaged in another round of technical buying today that left prices 2% higher by the close. July futures rose 14.75 cents to $7.5725, while September futures added 10.25 cents to $7.2450.
Corn basis bids were mostly steady to firm across the central U.S. after firming 3 to 15 cents higher across a half-dozen Midwestern locations today. An Iowa processor bucked the overall trend after sliding 3 cents lower.
Corn plantings reached 94% through Sunday, up from 86% a week ago and one point faster than the average trade guess. And while plantings are still below 2021’s pace of 98%, they have finally overtaken the prior five-year average of 92%. Seventy-eight percent of the crop is now emerged, versus the prior five-year average of 81%.
USDA also handed out its first round of quality ratings for corn in yesterday’s report, marking 73% of the crop in good-to-excellent condition. That was five points better than the average trade guess of 68%. Another 23% is rated fair, with the remaining 4% rated poor or very poor.
Per the latest data from the European Commission, EU corn imports during the 2021/22 marketing year are trending moderately above last year’s pace so far after reaching 603.9 million bushels through June 5.
Ukrainian agriculture exports improved 80% between April and May, with a total of 1.743 million metric tons. Corn exports accounted for more than half of that total, with 37.8 million bushels shipped last month. Ukraine is among the world’s leader in exporting several key commodities, including corn, wheat and sunflower oil.
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 yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 368,996 contracts, trending 55% above Monday’s final count of 238,548.
Soybeans
Soybean prices jumped higher for the fourth time in the last five sessions thanks to another round of technical buying. Soymeal and soyoil prices were also firm today. July soybean futures climbed 31.75 cents to $17.31, with August futures up 15.75 cents to $16.5150.
Soybean basis bids fell 3 cents at an Illinois river terminal on Tuesday while firming 5 cents at an Indiana elevator and holding steady elsewhere across the central U.S.
Soybean plantings increased from 66% a week ago to 78% through Sunday. Analysts were hoping to see a bit more progress, offering an average trade guess of 80% prior to the report. That puts 2022 progress 11 points below 2021’s pace of 89% but just one point behind the prior five-year average of 79%. And 56% of the crop is now emerged, versus the prior five-year average of 59%.
Brazil’s Anec anticipates the country will export 345.8 million bushels of soybeans in June. Brazil may also export around 57 million bushels of corn this month.
European Union soybean imports during the 2021/22 marketing year are trending slightly below last year’s pace, reaching 498.2 million bushels through June 5. EU soymeal imports are also down from a year ago, with 15.20 million metric tons over the same period.
The latest readings from the Purdue University / CME Group’s Ag Economy Barometer show farmer sentiment has fallen to the lowest levels since the beginning of the pandemic in early 2020, with a new score of 99 (anything above 100 is considered positive). Another point worth noting – of farmers surveyed, 78% said it was a bad time to invest in things such as machinery and buildings. Click here to learn more.
Preliminary volume estimates were for 217,193 contracts, moving moderately ahead of Monday’s final count of 144,346.
Wheat
Wheat prices were mixed but mostly lower after a round of technical selling and profit-taking on Tuesday. July Chicago SRW futures fell 18 cents to $10.75, July Kansas City HRW futures dropped 16.75 cents to $11.5325, and July MGEX spring wheat futures inched 0.75 cents higher to $12.3125.
Spring wheat plantings improved to 82% through June 5, versus 73% a week earlier. That’s three points short of the average trade guess of 85%. It’s also well behind 2021’s pace of 99% and the prior five-year average of 97%.
Winter wheat quality ratings improved slightly, firming a point to reach 30% rated in good-to-excellent conditions and matching analyst expectations. Another 305 of the crop is rated fair (down a point from last week), with the remaining 40% rated poor or very poor. Physiologically, 79% of the crop is now headed. Harvest progress has also been noted in six of the top 18 production states, with Texas (36%) leading the way. That puts the national average at 5%, which is one point slower than the prior five-year average of 6%.
European Union soft wheat exports during the 2021/22 marketing year have reached 931.1 million bushels through June 5, which is trending slightly above last year’s pace at this time. EU barley exports are down slightly year-over-year, with 311.4 million bushels over the same period.
Japan issued a regular tender to purchase 6.2 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, 52% is expected to be sourced from the U.S. The grain is for shipment in August.
Preliminary volume estimates were for 131,609 CBOT contracts, moving slightly above Monday’s final count of 125,220.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Jul
765
735
757
14.75
22-Sep
732.25
708
725.75
10.25
Soybeans
22-Jul
1732.75
1692.25
1728.25
31.75
22-Sep
1584.5
1558.25
1576
10.5
Soymeal $/ton
22-Aug
410.8
399
409.8
7.9
Soyoil cents/lb
22-Aug
80.01
78.89
79.6
0.14
Wheat $/bushel
22-Jul
1101
1058.5
1071.75
-18
22-Sep
1112
1071.25
1084.5
-17
KC Wheat
22-Jul
1177
1135.5
1149.25
-16.75
22-Sep
1183.5
1143
1156.25
-18.5
MPLS Wheat
22-Jul
1242.25
1215.75
1227.25
0.75
22-Sep
1241.5
1215.75
1224.75
-7.25
Live Cattle cents/lb
22-Jun
134.025
132.675
133.7
0.875
Feeder Cattle cents/lb
22-Sep
174.9
173.675
174.8
0.25
Lean Hogs cents/lb
22-Jul
110.125
107.75
109.3
0.325
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Jun
120.26
117.14
120.06
1.56
Diesel
22-Jun
4.4025
4.2466
4.3259
-0.0342
Unleaded Gasoline $/gallon
22-Jun
4.2412
4.0527
4.1628
-0.0302
Natural Gas
22-Aug
9.514
9.187
9.354
0.048
U.S. Dollar Index
22-Jun
102.85
102.26
102.315
-0.132
Gold $/ounce
22-Jul
1853.9
1836
1851.6
12.4
Copper
22-Jun
4.4375
4.381
4.4375
-0.002
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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