Wheat prices also incur major losses in Thursday’s session
Grain prices got caught in a broad selloff Thursday that also sent stocks, crude oil, metals, livestock and other commodities sharply lower today amid concerns over rising inflation and the potential for interest rate hikes after the Federal Reserve concluded its latest round of meetings earlier today. Improved forecasts in the Midwest and Plains generated additional headwinds today. Corn prices closed the session limit down, with soybean prices tumbling around 8% lower today. Some wheat contracts were relatively spared, but all contracts were down double digits today.
Rain will be variable over the next three days across the central U.S. Some areas will receive no measurable moisture between today and Sunday, while parts of the eastern Corn Belt could gather another 1” to 1.5” during this time, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally cool, wet weather is likely for much of the central U.S. between June 24 and June 30, according to NOAA’s latest 8-to-14-day outlook.
On Wall St., the Dow dropped 200 points to 33,833 on the heels of the latest Federal Reserve policy updates, which include the possibility of two interest rate hikes as soon as 2023. Energy futures also tilted lower, with crude oil down 1% in afternoon to stay just above $71 per barrel. Gasoline also dropped about 1%, with diesel down more than 1.75%. The U.S. Dollar firmed moderately.
On Wednesday, commodity funds were net buyers of soymeal (+4,500) and CBOT wheat (+1,000) contracts but were net sellers of corn (-2,500), soyoil (-15,000) and soybeans (-11,0000).
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Corn prices closed Thursday’s session limit down, pressured by a broad commodity selloff and the prospect for improved weather forecasts in the Midwest and Plains later this month. July and September futures each dropped 40 cents to close at $6.33 and $5.4850, respectively.
Corn basis bids showed plenty of variability across the central U.S. Thursday, moving as much as 15 cents higher at an Indiana ethanol plant while sliding as much as 5 cents lower at an Illinois river terminal today.
Old crop corn sales tumbled 95% below the prior four-week average, to less than 709,000 bushels. New crop sales fared better but were still disappointing overall, with 10.9 million bushels. That was toward the lower end of trade estimates, which came in as high as 35.4 million bushels. Cumulative sales for the 2020/21 marketing year still far exceed last year’s pace, with 2.148 billion bushels.
Corn export shipments were much more robust, with 65.4 million bushels, but that was still 16% below the prior four-week average. China (24.2 million) and Japan (21.7 million) were the top two destinations.
“Feedback From The Field” respondents this past week showed mixed results when it came to corn conditions. Some are still reporting good or excellent crop quality, while others are seeing increasingly stressed crops with hot, dry forecasts promising more trouble ahead. Click here to take our ongoing farmer survey on crop progress, which populates these weekly stories. This Google Map, updated daily, shows all past responses for our readers.
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In Ukraine, analyst APK-Inform has slightly raised its estimates for the country’s 2021 corn production, to 1.424 billion bushels.
Preliminary volume estimates were for 487,549 contracts, trending moderately higher than Wednesday’s final count of 391,031.
Soybean prices caught the worst losses of any grains today, tumbling 8% lower after prices dropped steeply throughout the session on the heels of a broad commodity selloff, which triggered plentiful technical selling. Worries over a record-breaking Brazilian harvest and better weather conditions ahead for the U.S. applied additional headwinds today. July futures dropped 123 cents to $13.2550, while August futures lost 111 cents to $12.91.
Soybean basis bids eroded 15 cents lower at an Indiana processor Thursday while firming 3 cents higher at an Illinois river terminal. Other locations across the Midwest held steady today.
This morning, private exporters reported to USDA the sale of 135,000 metric tons of soymeal for delivery to the Philippines during the 2020/21 marketing year, which began October 1.
Net sales for old crop soybeans were tepid, at 2.4 million bushels, and new crop sales only chipped in another 240,000 bushels, for a total of 2.8 million bushels. That was on the low end of trade guesses, which ranged between zero and 18.4 million bushels. Cumulative totals for the current marketing year are still nearly 800 million bushels ahead of the prior year’s pace, with 2.127 billion bushels.
Soybean export shipments tumbled 48% below the prior four-year average to a marketing-year low of 5.4 million bushels. Japan was the No. 1 destination, with 1.5 million bushels.
Preliminary volume estimates were for 353,964 contracts, nearly doubling Wednesday’s final count of 187,010.
Wheat prices followed corn, soybeans and a broad range of outside commodities lower today. Worries about the competitiveness of U.S. grain abroad applied additional headwinds. September Chicago SRW futures crumbled 22.25 cents to $6.4350, September Kansas City HRW futures lost 24.75 cents to $5.9450, and September MGEX spring wheat futures dropped 11.25 cents to $7.5525.
Wheat export sales reached 10.5 million bushels in the crop’s first full week of the 2021/22 marketing year. That was toward the lower end of trade estimates, which ranged between 7.3 million and 18.4 million bushels. Cumulative totals in the new marketing year have started off a bit slowly, with 16.0 million bushels.
Wheat export shipments were just under 11.0 million bushels. Nigeria was the No. 1 destination, with 2.8 million bushels.
Ukrainian analyst APK-Inform lowered its forecast for the country’s 2021 wheat production by 1.3% from prior estimates, moving it to 1.002 billion bushels. The group’s export outlook remained steady, at 725.7 million bushels.
Turkey issued an international tender top purchase as much as 14.5 million bushels of red milling wheat from optional origins with a deadline of June 30. The grain is for shipment in July and August.
Japan purchased 7.6 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 53% was sourced from the U.S. The grain is for shipment in August.
Preliminary volume estimates were for 164,290 CBOT contracts, tracking moderately above Wednesday’s final count of 137,421.
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