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Corn climbs on crumbling crop conditions

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Afternoon report: Soybeans and most wheat contracts also move higher on Tuesday

Grain prices were mixed but mostly higher today, anchored by solid gains from corn and soybeans after both crops saw an unexpected three-point quality ratings decline from USDA late Monday afternoon. Nearby corn contracts firmed more than 1.5%, with soybeans up 2.25%. Wheat prices were mixed – Chicago and Kansas City contracts each made solid inroads, while spring wheat futures suffered a modest setback.

Scattered showers should fall across portions of the Midwest and Plains between Wednesday and Saturday, especially north of I-80, but few areas are likely to see significant amounts, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts some seasonally wet weather returning to the central U.S. between July 5 and July 11, with widespread warmer-than-normal temperatures likely.

On Wall St., the Dow tumbled 450 points in afternoon trading to 30,987, partly on the still-declining consumer confidence index amid ongoing worries about high inflation and rising interest rates. Energy futures were mixed but mostly higher. Crude oil rose 2% this afternoon to reach $111 per barrel. Gasoline climbed 2.5% higher, while diesel dropped 0.5%. The U.S. Dollar firmed moderately.

On Monday, commodity funds were net buyers of soybeans (+9,000), soymeal (+5,000) and soyoil (+3,000) contracts but were net sellers of corn (-17,000) and CBOT wheat (-6,500).

Corn

Corn prices fought through a choppy session to finish with moderate gains today. Prices have had a hard time gaining much positive forward momentum over the past week or so, but lower-than-expected crop quality ratings provided the opportunity for some technical buying and bargain buying today. July futures rose 12.25 cents to $7.5650, while September futures added 6.25 cents to $6.6725.

Corn basis bids tilted 5 cents higher at an Iowa river terminal while holding steady across other Midwestern locations on Tuesday.

Corn ratings shifted moderately lower in the week ending June 26, moving from 70% of the crop rated in good-to-excellent condition a week ago down to 67%. That was two points below the average trade guess of 69%. Another 25% is rated fair (up a point from last week), with the remaining 8% rated poor or very poor (up two points from last week). Physiologically, 4% of this season’s corn crop is now silking, which is consistent with the prior five-year average.

The latest data from the European Commission shows that 2021/22 EU corn imports 636.6 million bushels through June 26. That’s a year-over-year increase of 7.5% so far.

Brazil’s Anec is forecasting that the country’s corn exports will reach 87.0 million bushels in June, which is down 2.7% from the group’s prior estimate from last week.

Preliminary volume estimates were for 308,272 contracts, shifting 25% lower than Monday’s final count of 408,829.

Soybeans

Soybean prices captured double-digit gains after USDA docked quality ratings by three points in its latest crop progress report. Spillover support from other commodities, including crude oil, lent additional tailwinds today. July futures climbed 36.75 cents to $16.6725, with August futures up 25.5 cents to $15.55.

Soybean basis bids slid 4 cents lower at an Ohio elevator on Tuesday but held steady elsewhere across the central U.S. today.

Soybean quality took an unexpected turn for the worse last week, losing three and falling to 65% rated in good-to-excellent condition. Another 27% is rated fair (up a point from last week), with the remaining 8% rated poor or very poor (up two points from last week).

USDA is currently tracking three physiological stages for this season’s soybean crop. Nearly all (98%) has now been planted, up from 94% a week ago and a point ahead of the prior five-year average of 97%. Ninety-one percent of the crop is emerged, matching the prior five-year average. And 7% is now blooming, down from the prior five-year average of 11%.

Brazil’s Anec estimates that the country will export 373.1 million bushels of soybeans in June. However, the current estimate is down 5.9% from its projection a week ago. Anec also reported that the country’s soymeal exports will come in around 1.683 million metric tons this month.

European Union soybean imports during the 2021/22 marketing year have reached 528.7 million bushels through June 26, which is slightly below last year’s pace so far. EU soymeal imports are also down slightly year-over-year, with 16.16 million metric tons over the same period.

South Korea issued an international tender to purchase 120,000 metric tons of soymeal from optional origins, which would be for arrival between October 25 and November 5. Offers must be submitted by today.

Preliminary volume estimates were for 210,251 contracts, trending slightly higher than Monday’s final count of 184,284.

Wheat

Wheat prices were mixed but mostly higher on Tuesday. Winter wheat contracts finally fell low enough to attract a round of bargain buying that helped prices firm as much as 1.75% today. Spring wheat failed to follow suit, closing with moderate losses. July Chicago SRW futures rose 15.75 cents to $9.1975, July Kansas City HRW futures gained 11.25 cents to $9.84, and July MGEX spring wheat futures dropped 7 cents to $10.3450.

Spring wheat plantings are nearly complete, with 98% progress through June 26. And 8% of the crop is headed, which is far behind 2021’s pace of 45% and the prior five-year average of 34%. Crop conditions saw a bit of shuffling. While 59% is rated in good-to-excellent condition (unchanged from last week), 33% is rated fair (down two points from a week ago) and 8% is rated poor or very poor (up two points from last week).

Winter wheat quality ratings were mostly stable, with 1% of the crop shifting from poor to very poor. Meantime, 30% of the crop is still rated in good-to-excellent condition, and 27% of the crop is still rated fair. Harvest is moving slightly faster than analysts expected, with 41% now complete through Sunday.

European Union soft wheat exports during the 2021/22 marketing year have reached 997.2 million bushels through June 26. That’s a year-over-year increase of 6.0% so far. EU barley exports are slightly below year-ago totals, meantime, with 314.6 million bushels.

Algeria purchased more wheat than previously estimated by European traders in last week’s tender after buying 27.2 million bushels from optional origins. The grain is for shipment in July or August, depending on the source.

Jordan purchased 2.2 million bushels of hard milling wheat from optional origins in an international tender (which was for twice that amount) that closed earlier today. The grain is for shipment in late September.

Preliminary volume estimates were for 104,486 CBOT contracts, which was up slightly from Monday’s final count of 99,098.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 762.75 744.25 759.5 12.25
22-Sep 675.5 662.25 669.75 6.25
Soybeans        
22-Jul 1668.25 1633.5 1663.75 36.75
22-Sep 1486.5 1455.25 1480.5 26.25
Soymeal                $/ton        
22-Aug 425.2 411.5 419.7 6.2
Soyoil                    cents/lb        
22-Aug 69.36 67.7 69 1.02
Wheat                    $/bushel        
22-Jul 935 907.25 921.25 15.75
22-Sep 949.75 921 936 16.25
KC Wheat        
22-Jul 997 972.75 983.75 11.25
22-Sep 1003.5 978.75 990.25 11
MPLS Wheat        
22-Jul 1048.75 1030.75 1034.75 -7
22-Sep 1055 1035.75 1040.75 -1.75
Live Cattle             cents/lb        
22-Jun 136.975 136.25 136.3 0.05
Feeder Cattle         cents/lb        
22-Sep 176.55 174.7 174.825 -1.975
Lean Hogs             cents/lb        
22-Aug 105.75 103.45 103.8 -1.075
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Aug 112.22 109.62 111.79 2.22
Diesel        
22-Jul 4.333 4.0425 4.2083 -0.0219
Unleaded Gasoline   $/gallon        
22-Jul 3.9442 3.7813 3.9297 0.0925
Natural Gas        
22-Aug 6.738 6.417 6.629 0.083
U.S. Dollar Index        
22-Sep 104.37 103.505 104.26 0.582
Gold                      $/ounce        
22-Jul 1830.9 1819.1 1816.5 -4.5
Copper        
22-Jun 3.8115 3.8115 3.8115 0.0325
Fertilizer Swaps     (as of 06/24)  
DAP Tampa-index           1,090.0 0
DAP-New Orleans              876.3 -11.02
Urea-New Orleans              526.4 41.34
Urea-Middle East              682.5 47.5
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              576.0 -25.35

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