Export optimism keeps soybean prices firm

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Afternoon report: Wheat faces another round of cuts Friday, with corn also trending lower

Grain prices were mixed but mostly lower as this week drew to a close. Wheat prices slumped 2.5% to 3.25% lower on a round of profit-taking and technical selling partly spurred by growing concerns that U.S. wheat is priced out of some key overseas markets right now. Corn prices also faded 0.5% lower, primarily on planting pressure. Soybeans bucked the overall trend, tracking 0.75% higher on sustained export optimism and relatively tight domestic and global stocks.

Over the next three days, expect to see plenty of moisture south of I-70, with some areas set to gather another 1” or more between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally dry weather building in the Central Plains between May 27 and June 2, with widespread warmer-than-normal conditions across the Midwest and Plains during that time.

The ongoing selloff continued on Wall St. today, with the Dow slumping 512 points lower in afternoon trading to 30,740 on worries over a possible recession and the general attitude that stocks had reached artificially high levels recently. Energy futures were mixed. Crude oil firmed 0.5% to stay above $112 per barrel. Gasoline trended slightly higher, while diesel dropped more than 1.25%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net buyers of soybeans (+9,000) and soymeal (+7,500) contracts but were net sellers of soyoil (-4,000) and CBOT wheat (-11,500). Funds were roughly even trading corn contracts yesterday.

Corn

Corn prices eroded 0.5% lower on a round of technical selling partly spurred by a faster planting progress this past week, with spillover weakness from wheat applying additional headwinds today. July futures dropped 5 cents to $7.7825, with September futures down 3.75 cents to $7.4675.

Corn basis bids were steady to mixed on Friday after firming 2 cents higher at an Indiana ethanol plant and eroding 3 to 17 cents lower at two Midwestern processors today.

Ukraine’s spring plantings are now 98% complete and will drop 25% from a year ago due to the ongoing Russian invasion, per the country’s agriculture ministry. That includes 10.304 million acres of corn, 2.292 million acres of spring barley and 466,000 acres of spring wheat.

In France, 98% of the country’s corn crop has been planted through May 16, up from 91% a week ago, per the FranceAgriMer farm office. And 93% is rated in good-to-excellent condition, sliding two points lower week-over-week.

When does a put option have no potential value? That’s a question that grain marketing consultant Roger Wright set out to answer in today’s Ag Marketing IQ blog. It’s part five in a series about how to get the most out of grain marketing tools – click here to learn more.

Mike Downey, the co-owner of Iowa-based Next Gen Ag Advocates, came away from the 94th annual Iowa State Soil and Land Valuation conference with the sense that speakers and panelists remain “cautiously optimistic” that farmers will still be profitable in 2022, despite higher costs and supply chain struggles. “Most credit this to the robust worldwide demand which remains for our agricultural products,” he notes. Downey shares some key takeaways from the conference in his latest More than Dirt blog – click here to learn more.

Preliminary volume estimates were for 164,515 contracts, fading moderately below Thursday’s final count of 199,730.

Soybeans

Soybean prices posted gains of more than 0.75% on Friday, as a general optimism over current supply and demand fundamentals led to a round of technical buying. July futures rose 15.25 cents to $17.0575, with August futures up 12.75 cents to $16.4325.

Soybean basis bids were steady to firm on Friday, climbing 2 to 10 cents higher at three Midwestern processors and firming 4 to 7 cents higher at two other central U.S. locations today.

China is planning to auction off another 18.4 million bushels of its state soybean reserves next Friday in an attempt to tamp down high prices and replenish local supplies. The country has already concluded a flurry of similar auctions earlier this year.

In April, Chinese purchases of Brazilian soybeans jumped 120% above March’s tally, with 231.5 million bushels after some weather-delayed cargoes finally arrived. China also imported 60.3 million bushels of soybeans from the United States last month, which was roughly half of its U.S. deliveries in March.

According to the U.S. Agricultural Export Development Council, USDA-FAS market development programs have boosted agricultural exports by an average of $9.6 billion each year between 1977 and 2019. These programs now represent nearly 14% of total ag export value. Farm Futures policy editor Jacqui Fatka dug into the details – click here to learn more.

Preliminary volume estimates were for 157,439 contracts, inching slightly ahead of Thursday’s final count of 155,238.

Wheat

Wheat prices fell for the third straight session on Friday, serving up further evidence that when commodity prices move high enough, they are prone to rounds of profit-taking. The fundamentals underpinning current price levels are still in place, however. July Chicago SRW futures dropped 30 cents to $11.7050, July Kansas City HRW futures lost 39 cents to $12.5625, and July MGEX spring wheat futures tumbled 44.5 cents to $12.86.

French soft wheat conditions continue to deteriorate amid hot, dry weather in recent weeks. Farm office FranceAgriMer reports that 73% of the 2021/22 crop is now rated in good-to-excellent condition through May 16, down nine points from a week ago. Another 18% of the crop is rated fair, with the remaining 8% rated poor or very poor.

Cargoes totaling 11 million bushels of Ukrainian wheat bound for Egypt remain stranded at port, with deliveries originally intended in February and March. Egypt’s supply minister noted that an extension for delivery has been granted amid discussions that the grain might be shipped via rail through Poland instead. Egypt is the world’s top wheat importer and sources a large percentage of its supplies through Ukraine.

If it’s been a while since you’ve ventured to FarmFutures.com, our Friday feature “7 ag stories you might have missed” is one of the easiest ways to catch up on the industry’s top headlines. The new batch of content includes items on the Wheat Quality Council’s annual winter wheat tour in Kansas, the potential for diesel shortages, damaging storms in the Northern Plains and more. Click here to get started.

Preliminary volume estimates were for 68,128 CBOT contracts, spilling moderately below Thursday’s final count of 88,327.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 782 774.5 778.75 -5
22-Sep 749.5 741.5 747 -3.75
Soybeans        
22-Jul 1710.75 1683.25 1705.25 15.25
22-Sep 1570 1550.25 1567 9.5
Soymeal                $/ton        
22-Aug 425.7 418 424.2 3.1
Soyoil                    cents/lb        
22-Jul 78.41 76.65 77.99 0.8
Wheat                    $/bushel        
22-Jul 1208 1168 1168.75 -30
22-Sep 1213.75 1174 1174.5 -30.25
KC Wheat        
22-Jul 1300 1251.75 1252.75 -39
22-Sep 1301.25 1255.25 1256.75 -41.5
MPLS Wheat        
22-Jul 1330 1276 1279 -44.5
22-Sep 1330 1275.5 1278.75 -43.25
Live Cattle             cents/lb        
22-Jun 132.325 131.3 131.425 -0.075
Feeder Cattle         cents/lb        
22-Aug 166.625 163.3 163.95 -1.25
Lean Hogs             cents/lb        
22-Jul 109.175 104.15 108.85 1.875
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 114.04 110.85 112.7 0.49
Diesel        
22-Jun 3.8236 3.7365 3.7476 -0.0444
Unleaded Gasoline   $/gallon        
22-May 3.896 3.7801 3.844 0.0123
Natural Gas        
22-Jul 8.285 7.943 8.217 -0.183
U.S. Dollar Index        
22-Jun 103.295 102.805 103.135 0.384
Gold                      $/ounce        
22-Jun 1847.8 1830.6 1836.3 -4.9
Copper        
22-May 4.32 4.256 4.26 -0.025
Fertilizer Swaps     (as of 05/20)  
DAP Tampa-index           1,117.5 -12.5
DAP-New Orleans              920.4 -15.43
Urea-New Orleans              691.7 -13.78
Urea-Middle East              708.5 -14
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              689.0 -5.51

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