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No pre-holiday fireworks – only duds

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Afternoon report: Soybeans and wheat faced steep cuts today; corn prices mixed.

NOTE: Grain markets will be closed on Monday, July 4, in observance of Independence Day. Be sure to enjoy some backyard grilling and fireworks – then come back Tuesday morning for our next round of agriculture news and analysis.

Farmers who were hoping for a little bit of pre-4th of July flash came away disappointed after Friday’s session featured ample technical selling. Soybean prices stumbled 3% lower on mostly favorable weather forecasts. Wheat took an even harder hit, with harvest pressure kicking most contracts 4% to 5% lower. Corn was mixed after an uneven round of technical maneuvering.

Wetter weather is on the way to the central U.S. between today and Monday, per the latest 72-hour cumulative precipitation map from NOAA. A fair amount of fields could gather 0.5” or more during this time. Further out, NOAA’s 8-to-14-day outlook predicts seasonally wet weather for the upper Midwest and eastern Corn Belt, while most of the country will see warmer-than-normal weather between July 8 and July 14.

On Wall St., the Dow trended 194 points higher in afternoon trading to 30,970, anchored by solid gains in homebuilding stocks. Energy futures also pushed higher this afternoon. Crude oil climbed 2.5% to reach $108 per barrel. Diesel rose more than 2%, while gasoline jumped 4.5% higher. Volatile natural gas prices soared 5.5% higher. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net buyers of soymeal (+1,500) contracts but were net sellers of corn (-18,000), soybeans (-1,500), soyoil (-5,500) and CBOT wheat (-11,500).

Corn

Corn prices were mixed in some uneven technical maneuvering after traders adjusted their positions ahead of a three-day holiday weekend. July futures firmed 7 cents to reach $7.5075, while September futures dropped 9.25 cents to $6.1950.

Corn basis bids were mostly steady across the central U.S. on Friday but did pick up 2 cents at an Illinois river terminal while eroding 5 to 15 cents lower at two Midwestern ethanol plants today.

French farm office FranceAgriMer estimates that 83% of this season’s crop is rated in good-to-excellent condition through June 27, easing a point lower from a week ago.

Argentina ended a weeklong trucking strike that was initiated due to diesel shortages. That will go a long way in jumpstarting the country’s grain export pace. Truck volume to ports on Thursday increased 70% from a day earlier. Argentina is the world’s No. 2 corn exporter and is a top seller of other commodities including soybeans and soymeal.

South Korea purchased 2.7 million bushels of corn from optional origins in a private deal earlier today. The grain is for arrival in October.

Popular herbicide atrazine, which has been killing weeds in corn fields for decades, is back under review by the U.S. Environmental Protection Agency, which is required to periodically reevaluate pesticides for possible risks. What are the potential implications of this decision? Farm Futures policy editor Jacqui Fatka took a closer look – click here to learn more.

Preliminary volume estimates were for 282,480 contracts, falling sharply below Thursday’s final count of 441,794.

Soybeans

Soybean prices turned sour on Friday despite some bullish numbers from yesterday’s big USDA reports. Favorable Midwestern forecasts were partly to blame for today’s declines, along with lurking recession worries, which could dampen demand. July futures tumbled 53 points lower to $16.22, with August futures down 50 cents to $15.1050.

Soybean basis bids were steady across most Midwestern locations on Friday but did climb 10 cents higher at an Indiana processor today.

China plans to auction another 18.4 million bushels of its state reserves of imported soybeans on July 8. The country has offered a series of similarly sized auctions throughout 2022 in an effort to lower prices and boost local supplies.

Brazil’s government reported that the country exported 372.2 million bushels of soybeans. That was a year-over-year decline of 8.5%. Brazil also exported 41.4 million bushels of corn last month.

Do you have a firm handle on how to handle volatility in the grain markets later this summer? Naomi Blohm, senior market adviser with Stewart Peterson, offered up some advice in yesterday’s Ag Marketing IQ blog. “The key is to understand that you can manage volatility by positioning yourself for both higher and lower prices, despite the outlook,” she offers. Blohm walks through what a strategic approach could look like – click here to learn more.

If it’s been awhile since you’ve visited 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 latest batch of content includes exclusive analysis about yesterday’s acreage and quarterly grain stocks reports from USDA, a controversial farmland purchase by a famous non-farmer, and more. Click here to get started.

Preliminary volume estimates were for 188,843 contracts, sliding slightly below Thursday’s final count of 210,298.

Wheat

Wheat prices continued to worsen on Friday, with harvest progress across the Northern Hemisphere and talks of a possible record-breaking production possible in Russia generating plenty of headwinds again today. September Chicago SRW futures fell 43 cents to $8.41, September Kansas City HRW futures lost 43.75 cents to $9.08, and September MGEX spring wheat futures dropped 40.25 cents to $9.4975.

French consultancy Agritel offered a forecast for 2022/23 Russian wheat production. The group expects it to reach 3.138 billion bushels, which would be a year-over-year increase of more than 13%, if realized. Russia is the world’s No. 1 wheat exporter.

Ukraine’s total grain exports in June tumbled 43% lower year-over-year amid the country’s ongoing struggles due to the Russian invasion. Port traffic is largely non-existent, forcing Ukraine to ship goods via rail (which is much less efficient).

Two French groups (Arvalis and Intercereales) have lowered their estimates for average wheat yields to 103.3 bushels per acre. That would be 3% below the prior 10-year average, if realized. This season’s harvest is just getting started, with farm office FranceAgriMer estimating that progress has reached 5% through June 27, adding that 64% of the crop is rated in good-to-excellent condition (steady from a week ago).

Pakistan has received multiple offers in its international tender to buy 18.4 million bushels of milling wheat, which closed earlier today. Additional details about the sale were not immediately available.

Preliminary volume estimates were for 84,509 CBOT contracts, trending moderately lower than Thursday’s final count of 121,962.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Jul 760 743.75 754.5 7
22-Sep 636.75 616.5 619.75 -9.25
Soybeans        
22-Jul 1683.25 1622 1626 -53
22-Sep 1488.5 1412.5 1416.75 -58.25
Soymeal                $/ton        
22-Aug 436.9 420.1 422.1 -12.9
Soyoil                    cents/lb        
22-Aug 67.01 63.98 64.43 -3.02
Wheat                    $/bushel        
22-Jul 878 832.75 831.25 -37.5
22-Sep 896.25 840.5 846 -43
KC Wheat        
22-Jul 955.25 907.5 911 -39
22-Sep 961.75 906 913.5 -43.75
MPLS Wheat        
22-Jul 958 931 941 -56.75
22-Sep 998.25 946 948 -40.25
Live Cattle             cents/lb        
22-Jun 135.65 132.7 134.6 2.025
Feeder Cattle         cents/lb        
22-Sep 178.55 176.15 177.275 1.05
Lean Hogs             cents/lb        
22-Aug 104.225 102.3 102.9 0.8
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Aug 109.34 104.56 108.36 2.6
Diesel        
22-Jul 4.0264 3.8136 3.954 0.1235
Unleaded Gasoline   $/gallon        
22-Jul 3.733 3.5075 3.6712 0.1349
Natural Gas        
22-Sep 5.909 5.557 5.71 0.318
U.S. Dollar Index        
22-Sep 105.44 104.515 104.93 0.466
Gold                      $/ounce        
22-Aug 1810.3 1783.4 1804.9 0.8
Copper        
22-Jul 3.704 3.571 3.635 -0.0795
Fertilizer Swaps     (as of 07/01)  
DAP Tampa-index           1,090.0 0
DAP-New Orleans              868.1 -8.27
Urea-New Orleans              570.5 44.09
Urea-Middle East              740.0 57.5
Urea-Black Sea              585.0 35
UAN (32%) New Orleans              565.5 -10.47

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