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Grain prices steer into the red

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Afternoon report: Corn, soybeans and wheat all spill lower in Wednesday’s session.

With grain prices at historically high levels, it doesn’t take much to trigger some technical selling and profit-taking here and there. That was the case today, after fresh estimates regarding a bumper Russian wheat crop and hopes that Ukraine’s exports can pick up the pace led to significant losses for some commodities. Wheat prices suffered the biggest drop, with most contracts down more than 3% by the close. Corn prices lost nearly 2.5%, with soybeans down around 1%.

Widespread rains are possible across much of the Midwest and Plains between Thursday and Sunday, but few areas are likely to gather much more than 0.5” during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet weather for parts of the Northern Plains, upper Midwest and eastern Corn Belt between May 25 and May 31, with warmer-than-normal conditions likely for the southern half of the U.S. as the month winds to a close.

On Wall St., the Dow crumbled 1,016 points lower in afternoon trading to 31,638 as investors returned to a “selloff attitude” as they continue to express anxiety over high inflation and some worse-than-expected earnings reports from retail giants Target and Walmart. Energy futures also spilled into the red, with crude oil dropping 2.75% this afternoon to $109 per barrel. Gasoline lost more than 5%, with diesel down around 3.5%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net buyers of soybeans (+10,000), soyoil (+3,000) and CBOT wheat (+13,000) contracts but were net sellers of corn (-5,500) and soymeal (-500).

Corn

Corn prices faded around 2.5% lower as a broad selloff of other commodities was enough for traders to engage in a round of technical selling and lock in profits today. A swifter planting pace this past week continues to apply additional headwinds as well. July futures dropped 18.25 cents to $7.8250, with September futures down 19.25 cents to $7.5350.

Corn basis bids rose 2 to 4 cents higher at two interior river terminals while holding steady elsewhere across the central U.S. on Wednesday.

Ethanol production held steady for the week ending May 13, with a daily average of 991,000 barrels, per the latest data from the U.S. Energy Information Administration, out earlier today. That marks the sixth consecutive week that production has failed to reach the 1-million-barrel-per-day benchmark. Ethanol stocks eased 1% lower this past week.

Ahead of the next USDA export report, out Thursday morning and covering the week through May 12, analysts think the agency will show corn sales ranging between 25.6 million and 53.1 million bushels.

The latest customs data shows China’s corn imports in April reached 87 million bushels, a year-over-year increase of 19.4%. Year-to-date corn imports are 8.5% ahead of last year’s pace so far, with 366.5 million bushels.

Brazil’s Anec now estimates that the country’s corn exports will reach 49.8 million bushels in May, which is moderately higher than its prior projection made a week ago. Anec also estimates that Brazilian wheat exports will reach 3.8 million bushels this month.

Turkey issued an international tender to purchase 6.9 million bushels of animal feed corn from optional origins that closes on May 26. The grain is for shipment in June.

Taiwan purchased 2.2 million bushels of animal feed corn, likely sourced from South Africa, in an international tender that closed earlier today. The grain is for shipment between August 16 and September 4.

Grain traveling the nation’s railways totaled 21,910 carloads last week, bringing cumulative totals for 2022 to 436,216 carloads. That leaves current trends at 9.9% below year-ago totals so far.

Preliminary volume estimates were for 243,546 contracts, moving moderately ahead of Tuesday’s final count of 203,210.

Soybeans

Soybean prices followed a broad range of other commodities lower after a round of technical selling today. Losses were not as severe as they were for corn and wheat, however. July futures fell 14 cents to $16.64, with August futures down 17.75 cents to $16.0650.

Soybean basis bids trended 3 cents higher at an Ohio elevator and also firmed 3 cents at two interior river terminals while holding steady at most other locations across the central U.S. on Wednesday. An Iowa processor bucked the overall trend after dropping 5 cents today.

Private exporters announced to USDA the sale of 8.4 million bushels of soybeans to unknown destinations. Of the total, 4% is for delivery during the current marketing year, which began September 1. The remaining 96% is for delivery in 2022/23.

Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 7.3 million and 40.4 million bushels for the week ending May 12. Analysts also expect to see soymeal sales ranging between 100,000 and 400,000 metric tons, plus up to 20,000 MT of soyoil sales.

Brazil’s Anec estimates that the country’s soybean exports will reach 421.9 million bushels in May, which is moderately above its prior forecast made a week ago. Anec also expects to see soymeal exports reach 2.009 million metric tons this month.

Curious how your fellow farmers are doing amid a sluggish planting season? Be sure to check out Feedback From The Field, which collects and shares a variety of farmer anecdotes. Click here to catch up on the latest round of intel and learn how to participate.

Preliminary volume estimates were for 149,467 contracts, firming 24% above Tuesday’s final count of 120,275.

Wheat

Wheat prices were hammered after reports of a possible record production underway in Russia triggered a round of technical selling and profit-taking. Traders also awaited news on a possible plan the United Nations is drafting to help Ukraine with its dire export situation. Despite today’s losses, prices remain at historically high levels. July Chicago SRW futures lost 47 cents to $12.3050, July Kansas City HRW futures dropped 43.25 cents to $13.2450, and July MGEX spring wheat futures fell 39.5 cents to $13.54.

Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between zero and 14.7 million bushels for the week ending May 12.

After the first day concluded at the annual Kansas wheat tour, scouts only tabulated yields at 39.5 bushels per acre so far – a significant drop from 59.2 bpa a year ago. “We don't seem to be catching (rains) and it feels like the crop is on a knife-edge, just hanging on,” according to Kansas State University Extension agronomist Jeanne Falk Jones. Kansas is the No. 1 winter wheat producing state.

Russian consultancy IKAR now estimates the county’s 2022/23 wheat production will reach 3.123 billion bushels – a record, if realized. What’s more, the head of IKAR, Dmitry Rylko, said he considers this estimate “conservative.” Russia is the world’s No. 1 wheat exporter.

China’s wheat imports in April fell 22.4% year-over-year, to 25.7 million bushels. Year-to-date totals inched 1.8% below last year’s pace, with 137.8 million bushels.

Preliminary volume estimates were for 100,313 CBOT contracts, tracking moderately below Tuesday’s final count of 135,708.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 802.25 778 781.5 -18.25
22-Sep 772.75 750.5 753.25 -19.25
Soybeans        
22-Jul 1686.75 1657 1662.75 -14
22-Sep 1566 1535.25 1539 -23
Soymeal                $/ton        
22-Aug 413.2 404.4 409.4 0.7
Soyoil                    cents/lb        
22-Jul 80.5 77.77 77.84 -2.41
Wheat                    $/bushel        
22-Jul 1280 1211.5 1230.75 -47
22-Sep 1280.5 1214.5 1233 -46
KC Wheat        
22-Jul 1368 1303 1324.5 -43.25
22-Sep 1369 1305.75 1327 -44
MPLS Wheat        
22-Jul 1394.75 1334.25 1352.75 -39.5
22-Sep 1391 1331.75 1351.25 -37.75
Live Cattle             cents/lb        
22-Jun 133 131.3 131.375 -1.625
Feeder Cattle         cents/lb        
22-Aug 167.325 164.6 165.4 -1.375
Lean Hogs             cents/lb        
22-Jul 108.825 104.5 108.15 0.4
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 115.42 108.46 109.11 -3.29
Diesel        
22-Jun 3.8418 3.6173 3.6581 -0.1412
Unleaded Gasoline   $/gallon        
22-May 3.9826 3.7 3.71 -0.2317
Natural Gas        
22-Jul 8.64 8.253 8.429 0.035
U.S. Dollar Index        
22-Jun 103.88 103.235 103.875 0.468
Gold                      $/ounce        
22-Jun 1822.9 1805 1810.4 -7.8
Copper        
22-May 4.243 4.156 4.1565 -0.083
Fertilizer Swaps     (as of 05/13)  
DAP Tampa-index           1,130.0 -45
DAP-New Orleans              935.9 -20.39
Urea-New Orleans              705.5 -8.27
Urea-Middle East              772.5 -72.5
Urea-Black Sea              585.0 0
UAN (32%) New Orleans              694.5 0

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