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No big Monday moves

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Afternoon report: Corn eases slightly lower, while soybeans and winter wheat prices make modest in-roads

It was a mostly quiet day in the grain markets on Monday, as traders appeared to be mostly content to keep an eye on the latest weather forecasts and hold for USDA’s next big supply and demand data dump when it releases its WASDE report on Friday. Corn prices faded slightly into the red, with spring wheat prices also down today. Soybeans and winter wheat fared better, capturing modest gains by the close.

Plenty of rain fell across the central U.S. this past week, but little to no moisture is expected for much of Iowa, Minnesota, the Dakotas and Nebraska between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts below-average precipitation for the Corn Belt between August 15 and August 21, with seasonally warm weather likely for the Midwest and Plains during this time.

On Wall St., the Dow inched 20 points higher in afternoon trading to 32,814 as investors assessed the approval of the $430 billion Inflation Reduction Act by the Senate, which will be voted on by the House later this week. Energy futures were mixed but mostly higher. Crude oil rose more than 1.5% this afternoon to $90 per barrel. Gasoline trended around 1% higher, while diesel spilled 1% lower. The U.S. Dollar softened moderately.

On Friday, commodity funds were net buyers of corn (+3,000) and soyoil (+4,500) contracts but were net sellers of soybeans (-3,500), soymeal (-4,500) and CBOT wheat (-2,500).

Corn

Corn prices tested smallish gains at times in Monday’s session but ultimately finished slightly in the red after some net technical selling today. September futures eased 0.75 cents to $6.0950, with December futures down 2.25 cents to $6.0775.

Corn basis bids were mostly steady across the central U.S. on Monday but did shift 6 cents lower at an Iowa processor and 3 cents lower at an Illinois river terminal today.

Private exporters reported two large corn sales on Monday, with 4.1 million bushels bound for Italy and 4.7 million bushels bound for unknown destinations. Both sales are for delivery during the 2022/23 marketing year, which begins September 1.

Corn export inspections reached 21.9 million bushels for the week ending August 4. That was below the entire range of trade estimates, which came in between 27.6 million and 45.3 million bushels. China was the No. 1 destination, with 8.2 million bushels. Cumulative totals for the 2021/22 marketing year are still running significantly below last year’s pace, with 2.068 billion bushels.

Prior to the next USDA crop progress report, out later this afternoon, analysts expect the agency to clip corn quality a point lower, with 60% of the crop rated in good-to-excellent through August 7. Individual trade guesses ranged between 59% and 62%.

If you missed the results of the latest Farm Futures grower survey, released last Friday, respondents are forecasting national corn yields at 174.8 bushels per acre this season. That would be a 2.2 bpa reduction from last year’s record-setting effort of 177.0 bpa, if realized. Farm Futures grain market analyst Jacqueline Holland takes a look at more of the survey’s findings – click here to learn more.

Three ports in Ukraine are now operational, and ten ships loaded with grain have set sail from them in the past week after the United Nations and Turkey brokered a deal for save travel through the Black Sea. Corn has been the primary commodity shipped, with around 9.6 million bushels exported so far this month. The reminder has been comprised of soybeans, sunflower oil and sunflower meal.

Preliminary volume estimates were for 336,071 contracts, moving ahead of Friday’s final count of 292,173.

Soybeans

Soybean prices tested and held onto modest gains after some net technical buying on Monday. Hot, dry forecasts have generally proved supportive over the past couple of weeks – and plenty more seasonally hot weather is expected later this month. August futures added 4.75 cents to $16.1950, with September futures up 5.75 cents to $14.69.

Soybean basis bids were mostly steady across the central U.S. on Monday but did show some volatility today after sinking 25 cents lower at an Illinois river terminal while firming 12 cents at an Ohio elevator.

Private exporters announced to USDA the sale of 5.2 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which begins September 1.

Soybean export inspections improved moderately to reach 31.9 million bushels last week. That bested all trade guesses, which ranged between 11.0 million and 27.6 million bushels. China (9.1 million) and Germany (8.7 million) were the top two destinations. Cumulative totals for the 2021/22 marketing year are still moderately behind last year’s pace, with 2.004 billion bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts are expecting the agency to dock soybean quality by a point, with 59% rated in good-to-excellent condition through August 7. Individual trade guesses ranged between 58% and 61%.

An exclusive Farm Futures survey released late last week shows that soybean yields could reach a new record high of 52.5 bushels per acre this season. Even so, “the estimate is surprisingly optimistic considering current crop conditions and the impending hot and dry weather expected during the middle of the month as the crop approaches peak pod fill stages,” writes Farm Futures grain market analyst Jacqueline Holland. If realized, these per-acre yields would generate a total 2022 production of 4.59 billion bushels, which is nearly 90 million bushels above USDA’s current estimate.

Preliminary volume estimates were for 107,857 contracts, shifting moderately below Friday’s final count of 150,206.

Wheat

Wheat prices were mixed but mostly higher in an uneven round of technical maneuvering today. Winter wheat futures stood firm, while spring wheat futures eroded slightly lower. September Chicago SRW futures added 5.75 cents to $7.8150, September Kansas City HRW futures picked up 1.25 cents to $8.4950, and September MGEX spring what futures fell 3.25 cents to $8.8325.

Wheat export inspections exceeded expectations last week, coming in at 22.2 million bushels and besting all trade estimates, which ranged between 9.2 million and 20.2 million bushels. Mexico was the No. 1 destination, with 3.6 million bushels. Cumulative totals for the 2022/23 marketing year are starting off moderately slower than last year’s pace so far, with 128.7 million bushels.

Prior to this afternoon’s crop progress report from USDA, analysts think the agency will show stable spring wheat conditions, with 70% of the crop rated in good-to-excellent condition through Sunday. USDA’s first harvest progress data could show progress of 9%. And winter wheat harvest progress is expected to reach 89%, up from 82% a week ago.

Russian consultancy IKAR has increased its forecast for the country’s 2022 wheat production by around 5% to 3.491 billion bushels, citing higher yields in Russia’s Central and Volga regions. Russia is the world’s No. 1 wheat exporter. Another consultancy, Sovecon, estimates that July wheat exports reached 84.5 million bushels.

Preliminary volume estimates were for 109,088 CBOT contracts, trending slightly higher than Friday’s final count of 102,198.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Sep 616 601.75 608.5 -0.75
22-Dec 611 601 607.25 -2.25
Soybeans        
22-Sep 1478.75 1453.75 1464 5.75
22-Dec 1421 1391.25 1400 -6.75
Soymeal                $/ton        
22-Sep 440.4 431.5 436.4 1
Soyoil                    cents/lb        
22-Sep 66.76 64.88 65.35 0.15
Wheat                    $/bushel        
22-Sep 793.75 760.75 779.75 5.75
22-Dec 812.25 780.5 799.25 6.75
KC Wheat        
22-Sep 862.75 829.75 847.75 1.25
22-Dec 869.5 837 855 1.25
MPLS Wheat        
22-Sep 899 874.25 880.75 -3.25
22-Dec 913.5 887.75 894.75 -8
Live Cattle             cents/lb        
22-Aug 138.775 137.875 138.325 0.45
Feeder Cattle         cents/lb        
22-Sep 186.25 183.5 185.65 2.225
Lean Hogs             cents/lb        
22-Oct 100.75 98.075 100.35 1.95
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Sep 90.89 87.22 90.45 1.44
Diesel        
22-Aug 3.2329 3.1424 3.1674 -0.0485
Unleaded Gasoline   $/gallon        
22-Aug 2.9054 2.8288 2.8785 0.0229
Natural Gas        
22-Oct 7.909 7.536 7.6 -0.451
U.S. Dollar Index        
22-Sep 106.67 105.975 106.3 -0.19
Gold                      $/ounce        
22-Sep 1790.3 1771.5 1785.5 12.6
Copper        
22-Aug     3.553  
Fertilizer Swaps     (as of 08/05)  
DAP Tampa-index              912.5 -4
DAP-New Orleans              837.8 0
Urea-New Orleans              661.4 79.92
Urea-Middle East              765.0 57.5
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              439.8 0

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