Grains finish the week on a high note

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Afternoon report: Corn, soybeans and wheat all trend higher in Friday’s session

Grain prices made moderate inroads on Friday amid a broad-reaching round of technical buying as traders squared positions ahead of the three-day Memorial Day weekend. Corn prices rose nearly 1.5% higher, with some wheat contracts capturing similar amounts. Soybeans found more modest gains of around 0.25%. A wide variety of bullish factors are still in play, including poor U.S. wheat crop quality, a sluggish spring planting pace for corn and soybeans, the ongoing war in Ukraine and more.

More wet weather will be rolling through the Northern Plains this weekend, with drier conditions more likely farther east, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally cool weather returning to the Corn Belt between June 3 and June 9, with wetter-than-normal conditions sticking around the Northern Plains.

On Wall St., the Dow improved 355 points to 32,992 and is set to snap an eight-week losing streak, thanks to much-needed data out today that showed inflation is slowing a bit. Energy futures were also firm today, with crude oil up nearly 1% this afternoon to $115 per barrel. Diesel rose 1.5%, while gasoline jumped 3.5% higher. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of soybeans (+17,500), soymeal (+3,000) and soyoil (+5,000) contracts but were net sellers of corn (-25,000) and CBOT wheat (-3,500).

NOTE: Grain markets will be closed on Monday, May 30, in observance of the federal Memorial Day holiday. Be sure to come back first thing Tuesday morning for our next round of agriculture news and analysis. In the meantime, here’s hoping you and yours have a safe, happy holiday weekend.

Corn

Corn prices improved by almost 1.5% on Friday as traders made final preparations ahead of a three-day holiday weekend. However, prices finished the week in the red for the fourth consecutive time – the longest losing streak since the summer of 2020. July futures firmed 11.25 cents to $7.7625, with September futures up 10.75 cents to $7.4475.

Corn basis bids were largely steady but slightly mixed at a few Midwestern locations on Friday, moving as much as 3 cents higher at an Iowa ethanol plant and as much as 3 cents lower at an Ohio elevator today.

A recent USDA-ERS report shows U.S. corn exports in fiscal year 2022 are now forecasted to improve by $2.2 billion, reaching a new total of $19.1 billion “due to record volumes and higher unit values. Total U.S. agricultural exports are expected to improve $7.5 billion to reach a record $191.0 billion.

European Union grain trade association Coceral has slightly lowered its estimates for EU corn production this season to 2.598 billion bushels. That would be a year-over-year decrease of 1.8%, if realized.

The Ukrainian Agribusiness Club estimates that the country’s total grain production will drop nearly 38% this season. That includes corn production sliding 39% lower to 1.012 billion bushels and wheat production dropping 44% to 661.4 million bushels. Ukraine is a significant exporter of both crops.

French farm office FranceAgriMer reports that 99% of the country’s 2022 corn crop has been planted through May 23. It also notes that 91% of the crop is rated in good-to-excellent condition, versus 93% in the prior week.

“Memorial Day is one of the key moments for marketers ahead of growing season weather volatility,” notes grain market analyst Bryce Knorr. Learn what growers could reasonably expect in 2022 – at least based on historical trends – in today’s Ag Marketing IQ blog. Click here to learn more.

Preliminary volume estimates were for 179,164 contracts, falling short of Thursday’s final count of 213,070.

Soybeans

Soybean prices climbed to their highest levels since late February after another round of technical buying today. Concerns over a slower-than-normal planting pace and spillover strength from corn and wheat was enough to keep prices in the green. July futures added 6 cents to $17.3250, with August futures up 3.75 cents to $16.6325.

Soybean basis bids were mostly steady to soft across the central U.S. after dropping 5 to 15 cents lower at five Midwestern locations. An Indiana processor bucked the overall trend after firming 5 cents higher today.

A recent USDA-ERS report shows soybean exports for fiscal year 2022 are now valued at $32.3 billion, with higher volumes more than offsetting lower unit values. That’s up $1.0 billion from USDA’s prior February forecast and would be a record, if realized.

“The top four products in the global edible oils market — palm, soybean, rapeseed (canola) and sunflower — were tight before the war,” notes Farm Futures grain market analyst Jacqueline Holland. But after Russia invaded Ukraine, some serious shakeups occurred. Click here to learn more by reading part four of Holland’s “Black Swan in the Black Sea” series.

If it’s been a couple of days since you’ve been to FarmFutures.com, you can catch up on the industry’s top headlines by reading our Friday feature, “7 ag stories you might have missed.” The latest batch of content includes updates on “the highest-quality burger the [fast-food] market has ever seen,” placing blame on the growing global food crisis and more. Click here to get started.

Preliminary volume estimates were for 165,325 contracts, trending well below Thursday’s final count of 248,146.

Wheat

Wheat prices jumped 0.75% to 1.5% higher Friday on another round of technical buying as traders squared positions ahead of the Memorial Day weekend. Volatility in both directions was frequent throughout the week. July Chicago SRW futures rose 13.75 cents to $11.57, July Kansas City HRW futures added 9 cents to $12.3750, and July MGEX spring wheat futures climbed 18.75 cents to $13.11.

European Union grain trade association Coceral bumped up its soft wheat production estimates to 5.254 billion bushels, citing improved weather in Spain. The group also slightly raised its estimates for French soft wheat production, which is in contrast to some other forecasts because the country has recently been suffering through ample hot, dry weather.

French farm office FranceAgriMer reports that the country’s soft wheat quality ratings have degraded another four points lower, with 69% rated in good-to-excellent condition through May 23. Quality ratings have eroded 20 points lower over the past three weeks. Year-ago results saw 80% of the crop in good-to-excellent condition.

South Korea purchased 4.6 million bushels of wheat sourced from the United States, Canada and Australia in a tender that closed on Thursday, Approximately one-third of the total was sourced from the U.S. The grain is for shipment starting in July.

Preliminary volume estimates were for 45,529 CBOT contracts, sliding 31% below Thursday’s final count of 66,351.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 780.5 761 777.25 11.25
22-Sep 748 730.5 744.75 10.75
Soybeans        
22-Jul 1744.25 1718.75 1732.25 6
22-Sep 1593.5 1576.75 1584.5 -1.5
Soymeal                $/ton        
22-Aug 428.9 420.4 427.3 4.7
Soyoil                    cents/lb        
22-Aug 78.53 77.18 77.49 -1.18
Wheat                    $/bushel        
22-Jul 1170.25 1133.5 1157.5 13.75
22-Sep 1178.75 1142 1166.25 14
KC Wheat        
22-Jul 1251 1212 1235.25 9
22-Sep 1256.25 1218 1241.25 8
MPLS Wheat        
22-Jul 1320.25 1288 1304.75 18.75
22-Sep 1320 1288 1304.75 14.25
Live Cattle             cents/lb        
22-Jun 132.95 132.05 132.125 -0.275
Feeder Cattle         cents/lb        
22-Aug 170.325 168.8 168.8 -0.925
Lean Hogs             cents/lb        
22-Jul 112.85 111.05 111.6 -0.225
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jun 115.3 112.85 114.84 0.75
Diesel        
22-Jun 4.0211 3.9103 3.9934 0.0254
Unleaded Gasoline   $/gallon        
22-May 4.027 3.8567 4.009 0.1316
Natural Gas        
22-Aug 8.875 8.275 8.708 -0.172
U.S. Dollar Index        
22-Jun 101.955 101.455 101.73 -0.128
Gold                      $/ounce        
22-Jun 1862.7 1849.7 1850.9 3.3
Copper        
22-Jun 4.31 4.255 4.31 0.0505
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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